Making closing entries, preparing financial statements, and computing gross profit percent...

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:

Requirements

1. Journalize Daddy’s closing entries.

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

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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.

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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?