In: Accounting
Part A
Jay Company provides you with the following information for the current accounting period:
Sales (net) $400,000
Beginning inventory at cost 80,000
Purchases (net) 230,000
Required:
a. | |||
Beginning Inventory | $ 80,000 | ||
Add: | Purchases | $ 2,30,000 | |
(i) | Cost of goods available for sale | $ 3,10,000 | |
Sales | $ 4,00,000 | ||
Less: | Gross profit ($400000 X 40%) | $ 1,60,000 | |
(ii) | Cost of goods sold | $ 2,40,000 | |
(i) - (ii) | Ending Inventory | $ 70,000 | |
b. | |||
Beginning Inventory | $ 80,000 | ||
Add: | Purchases | $ 2,30,000 | |
(i) | Cost of goods available for sale | $ 3,10,000 | |
Sales | $ 4,00,000 | ||
Less: | Gross profit [$400000*[1/(100/40 + 1)]] | $ 1,14,286 | |
(ii) | Cost of goods sold | $ 2,85,714 | |
(i) - (ii) | Ending Inventory | $ 24,286 |