Required:(a) Compute (i) the cost of goods sold; (ii) gross profit; and (iii) the gross profit rate (in %) for the year 2021. Show workings. (b) Prepare two closing entries to create the Cost of Goods Sold account and update the Inventory account. Serenity Company ("Serenity") is a shop selling electrical goods and adopts perpetual inventorymethod. As at 30 November 2021, the inventory account has a balance of S$230,000 (Dr.). Beloware transactions of Serenity in December. Prepare the journal entries of the transactions.December1Received $500 from a customer to settle an outstanding account.3Purchased electric cookers from Teta Company for $10,000 on account.Returned two defective cookers to Teta Company purchased on 3December at $450 per piece.5A customer returned two pieces of goods to Serenity. The customeroriginally bought the goods at $600 per piece, now received a cash refund.Serenity sold the goods at 20% gross profit rate.1015Paid the amount owed to Teta Company.20Sold all the cookers bought from Teta Company this month on credit at20% gross profit rate.31Serenity conducted an inventory count and found there was $215,960inventory on hand. Arppel Company uses a periodic inventory system and closes its accounts annually on 31December. Below are extracted from the books of the Company:Account balance as at 31 Dec 2020InventoryAccount balance as at 31 Dec 2021$42,000PurchasesSalesSales Returns$440,000S890,000S22,000A complete physical inventory taken as at 31 December 2021 indicates goods costing $48,000remains in stock.

Name: Required:(a) Compute (i) the cost of goods sold; (ii) gross profit; an
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Required:(a) Compute (i) the cost of goods sold; (ii) gross profit; and (iii) the gross profit rate (in %) for the year 2021. Show workings. (b) Prepare two closing entries to create the Cost of Goods Sold account and update the Inventory account. Se