Paragliding Corp. is a Merchandizer Case Study - Accounting and Finance Assignment Help

Assignment Task:

Task:

Question no 1 10
Paragliding Corp. is a merchandizer carrying para gliding gear and kit. At the end of its third year of operation and is struggling. A major problem is that its cost of inventory has continually increased in these three years. In the first year of operations, the store assigned inventory costs using LIFO. A loan agreement the store has with its bank, its prime source of financing, requires the store to maintain a certain profit margin and current ratio. The store’s owner is currently looking over Paragliding’s preliminary financial statements for its third year. The numbers are not favorable.

Required:
As an Advisor you must recommend a method that how does Paragliding Corp. improve its net profit margin and current ratio using Inventory costing methods? And defend your Answer that how it improves store’s net profit margin and current ratio. Also explain that is your answer comply with laws and ethics?

Question no 2 15
Kettle Industries completes these transactions during March of the current year (the terms of all its credit sales are 4/10, n/30).
March 1: Purchased $8,000 of merchandise on credit from Leon Company, invoice dated Feb 28, terms 3/10, n/30.
3 Issued Check No. 411 to The Weekly for advertising expense, $425.
5 Sold merchandise on credit to Kalley Shelby, Invoice No. 878, for $15,200 (cost is $12,500).
6 Sold merchandise on credit to Ruth Blake, Invoice No. 919, for $7,500 (cost is $4,300).
7 Purchased $1,250 of store supplies on credit from Plaine, Inc., invoice dated March 7, terms n/10 EOM.
8 Received a $250 credit memorandum from Plaine, Inc., for the return of store suppliesreceived on March 7.
9 Purchased $38,220 of store equipment on credit from Charm’s Supply, invoice dated March 8, terms n/10 EOM.
10 Issued Check No. 301 to Teton Company in payment of its June 30 invoice, less the discount.
13 Sold merchandise on credit to Ashton Moore, Invoice No. 920, for $8,550 (cost is $5,230).
14 Sold merchandise on credit to Kim Nettle, Invoice No. 921, for $5,100 (cost is $3,800).
15 Received payment from Kim Nettle for the March 5 sale, less the discount.
15 Issued Check No. 302, payable to Payroll, in payment of sales salaries expense for the first half of the month, $31,850. Cashed the check and paid employees.
15 Cash sales for the first half of the month are $118,350 (cost is $76,330). (Cash sales are recorded daily using data from the cash registers but are recorded only twice in this problem to reduce repetitive entries.)

16 Received payment from Ruth Blake for the March 6 sale, less the discount.
17 Purchased $7,200 of merchandise on credit from Drake Company, invoice dated March
17, terms 2/10, n/30.
20 Purchased $650 of office supplies on credit from Charm’s Supply, invoice dated March 19, terms n/10 EOM.
21 Borrowed $15,000 cash from College Bank by signing a long-term note payable.
23 Received payment from Ashton Moore for the March 13 sale, less the discount.
24 Received payment from Kim Nettle for the March 14 sale, less the discount.
24 Received a $2,400 credit memorandum from Drake Company for the return of defective merchandise received on March 17.
26 Purchased $9,770 of merchandise on credit from Teton Company, invoice dated March
26, terms 2/10, n/30.
27 Issued Check No. 303 to Drake Company in payment of its March 17 invoice, less the return and the discount.
29 Sold merchandise on credit to Ruth Blake, Invoice No. 922, for $17,500 (cost is $10,850).
30 Sold merchandise on credit to Ashton Moore, Invoice No. 923, for $16,820 (cost is $9,840).
31 Issued Check No. 304, payable to Payroll, in payment of the sales salaries expense for the last half of the month, $31,850.
31 Cash sales for the last half of the month are $80,244 (cost is $53,855).
Required:
• Prepare Financial statements
Question no 3 15
Mark Company uses a perpetual inventory system. It entered the following calendar-year 2018 purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.)

Jan. 1 Beginning inventory . . . . . . . . . . 600 units @ $45.00 per unit
Feb. 10 Purchase . . . . . . . . . . . . . . . . . . . 400 units @ $42.00 per unit
Mar. 13 Purchase . . . . . . . . . . . . . . . . . . . 200 units @ $27.00 per unit
Mar. 15 Sales . . . . . . . . . . . . . . . . . . . . . . 800 units @ $75.00 per unit
Aug. 21 Purchase . . . . . . . . . . . . . . . . . . . 100 units @ $50.00 per unit
Sept. 5 Purchase . . . . . . . . . . . . . . . . . . . 500 units @ $46.00 per unit
Sept. 10 Sales . . . . . . . . . . . . . . . . . . . . . . 600 units @ $75.00 per unit
Totals . . . . . . . . . . . . . . . . . . . . . 1,800 units 1,400 units

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