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    Calculate the gross profit percentage and rate of inventory turnover for Speed Up Auto Parts

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    The accounting records of Speed Up Auto Parts on August 31, 2008, list the following amounts:

    Cost of Goods Sold.............................................$104,000
    Sales Discounts................................................... 4,600
    Equipment........................................................... 65,200
    Salary Payable.................................................... 2,200
    Accounts Payable................................................ 19,500
    Cam Engine, Withdrawals................................... 31,600
    Sales Returns and Allowances............................ 14,300
    Selling Expenses................................................. 21,400
    Cash................................................................... 15,700
    Inventory, August 31, 2007................................ 40,000
    Inventory, August 31, 2008................................ 43,200
    Sales Revenue................................................... 206,500
    Notes Payable.................................................... 6,100
    Accumulated Depreciation, Equipment............... 17,700
    Cam Engine, Capital........................................... 66,000
    General and Administrative Expenses................ 15,100
    Accounts Receivable.......................................... 6,900

    Requirements:
    *Please see attachment L5A2.xsl
    1. Prepare a multi-step income statement to show the computation of Speed Up Auto Parts' net sales revenue, gross profit, and net income for the year ended August 31, 2008.
    2. Cam Engine, owner of the business, strives to earn gross profit of $85,000 and net income of $45,000. Did Cam achieve these goals? Explain
    3. Compute the company's gross profit percentage and rate of inventory turnover for 2008.

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    https://brainmass.com/business/inventory-management/rate-inventory-turnover-speed-auto-parts-557096

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    Solution Summary

    The rate of inventory turnovers for speed up auto parts are given.

    $2.19