P5-39B The adjusted trial balance of Daddy’s Music Company at April 30, 2012, follows:

Price: $3.99 

P5-39B Making closing entries, preparing financial statements, and

computing gross profit percentage, inventory turnover, and days in inventory

[20–30 min]

The adjusted trial balance of Daddy’s Music Company at April 30, 2012, follows:

DADDY’S MUSIC COMPANY

Adjusted Trial Balance

April 30, 2012

Cash	$4,300
Accounts receivable	38,200
Inventory	17,800
Supplies	600
Furniture	39,400
Accumulated depreciation		9,000
Accounts payable		13,600
Salary payable		1,200
Unearned sales revenue		6,600
Note payable, long–term		14,000
Otousan, capital		40,100
Otousan, drawing	40,000	180,000
Sales revenue
Sales returns	8,000
Cost of goods sold	81,800
Selling expense	19,200
General expense	14,000
Interest expense	1,200
Total	$264,500	$264,500

Requirements

1. Journalize Daddy’s closing entries.

2. Prepare Daddy’s single-step income statement for the year.

3. Compute the gross profit percentage, the rate of inventory turnover, and the

days in inventory for the fiscal year ending April 30, 2012. Inventory on hand

one year ago, at April 30, 2011, was $13,000

4. For the year ended April 30, 2011, Daddy’s gross profit percentage was 50%, and

inventory turnover was 4.9 times. Did the results for the year ended April 30, 2012,

suggest improvement or deterioration in profitability over last year?