sandra mclellan operates a clothing retail operation she purchases all merchandise i 533598

Sandra McLellan operates a clothing retail operation. She purchases all merchandise inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2010, 2011, 2012, and 2013.

Instructions

(a) Calculate cost of goods sold for each of the 2011, 2012, and 2013 fiscal years.

(b) Calculate the gross profit for each of the 2011, 2012, and 2013 fiscal years.

(c) Calculate the ending balance of accounts payable for each of the 2011, 2012, and 2013 fiscal years.

(d) The vice presidents of sales, marketing, production, and finance are discussing the company”s results with the CEO. They note that sales declined in fiscal 2013. They wonder whether that means that profitability, as measured by the gross profit rate, necessarily also declined. Explain, calculating the gross profit rate for each fiscal year to help support your answer.