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Using the information on your August financial statements calculate the following ratios for your company using an Excel spreadsheet:

1. Gross Profit Percentage
2. Accounts Receivable Turnover Ratio
3. Days Sales in Receivables
4. Debt Ratio
5. Debt to Equity Ratio
6. Profit Margin Ratio
7. Rate of Return on Total Assets
8. Asset Turnover Ratio

Show the information in your spreadsheet in three columns:

Ratio Name Formula/Amounts Ratio Value

1. Gross Profit Percentage
2. Accounts Receivable Turnover Ratio
3. Days Sales in Receivables
4. Debt Ratio
5. Debt to Equity Ratio
6. Profit Margin Ratio
7. Rate of Return on Total Assets
8. Asset Turnover Ratio

These are the journal entries:

Step 1: Entries

Date	Account Titles	Ref.	Debit	Credit
Aug	Raw Materials Inventory`	$3,100
	Accounts Payable		$3,100
	(To record purchase of raw materials on account)
Aug	Selling and Administrative Expenses	$1,200
	Cash			$1,200
	(To record selling and administrative expenses paid)
Aug	Work in Process	$3,900
	Raw Materials Inventory`	$3,900
	(To raw materials used in production)
Aug	Factory Overhead	$300
	Raw Materials Inventory`	$300
	(To record use of indirect materials)
Aug	Work in Process	$3,600
	Factory Overhead	$400
	Accounts Payable		$4,000
	(To record direct and indirect wages incurred, 4,000 x 90% = 3,600 and 4,000 x 10% = 400, respectively)
Aug	Factory Overhead	$1,300
	Accounts Payable		$1,300
	(To record factory overhead incurred)
Aug	Work in Process	$2,160
	Factory Overhead		$2,160
	(To record factory overhead assigned to work in process at 60% of direct labor cost; 3,600 x 60% = $2,160)
Aug	Finished Goods Inventory	$10,000
	Work in Process		$10,000
	(To record cost of products completed)
Aug	Accounts Receivable	$17,500
	Sales			$17,500
Aug	Cost of Goods Sold	$9,500
	Finished Goods Inventory	$9,500
	(To record cost of goods sold)
Step 2:
Adjustment for over or under allocated overhead:
Aug-31	Factory Overhead	$160
	Cost of Goods Sold	$160
	(To record adjustment for over-applied factory overhead)

(over applied overhead = 2,160 - (300 + 400 + 1,300) = $160)

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