Question
In: Accounting
Retail Method; Gross Profit Method Selected data on inventory, purchases, and sales for Celebrity Tan Co....
Retail Method; Gross Profit Method
Selected data on inventory, purchases, and sales for Celebrity
Tan Co. and Ranchworks Co. are as follows:
| Cost | Retail | ||||
|---|---|---|---|---|---|
| Celebrity Tan Co. | |||||
| Inventory, August 1 | $216,000 | $328,000 | |||
| Transactions during August | |||||
| Purchases (net) | 2,490,000 | 3,772,000 | |||
| Sales | 3,880,000 | ||||
| Ranchworks Co. | |||||
| Inventory, March 1 | $278,000 | ||||
| Transactions during March through November: | |||||
| Purchases (net) | 3,698,000 | ||||
| Sales | 6,057,000 | ||||
| Estimated gross profit rate | 38% | ||||
Required:
1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting details of the computations.
| Celebrity Tan Co. | |||
| Estimated Cost of Inventory | |||
| August 31 | |||
| Cost | Retail | ||
| $ | $ | ||
| $ | $ | ||
| Ratio of cost to retail price: | % | ||
| $ | |||
| $ | |||
2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations.
| Ranchworks Co. | ||
| Estimated Cost of Inventory | ||
| November 30 | ||
| Cost | ||
| $ | ||
| $ | ||
| $ | ||
| $ | ||
2b. Assume that Ranchworks Co. took a physical
inventory on November 30 and discovered that $214,660 of inventory
was on hand. What was the estimated loss of inventory due to theft
or damage during March through November?
$
Solutions
Expert Solution
Solution 1:
| Celebrity Tan Company | ||
| Estimated cost of inventroy | ||
| 31-Aug | ||
| Particulars | Cost | Retail |
| Inventory, August 1 | $216,000.00 | $328,000.00 |
| Purchases during august | $2,490,000.00 | $3,772,000.00 |
| Total goods available for sale | $2,706,000.00 | $4,100,000.00 |
| Cost to retail ratio | 66.00% | |
| Sales at retail price | $3,800,000.00 | |
| Ending inventory at retail | $300,000.00 | |
| Ending inventory at Cost | $198,000.00 | |
Solution 2a:
| Ranchworks Co. | ||
| Estimated cost of inventory | ||
| 30-Nov | ||
| Particulars | Cost | |
| Inventory, August 1 | $278,000.00 | |
| Purchases during august | $3,698,000.00 | |
| Total goods available for sale | $3,976,000.00 | |
| Sales | $6,057,000.00 | |
| Gross profit rate | 38% | |
| Cost of goods sold | $3,755,340.00 | |
| Ending inventory at cost | $220,660.00 | |
Solution 2b:
Actual inventory on hand on november 30 = $214,660
Required inventory = $220,660
Estimated loss of inventory due to theft or damage during March through November = $220,660 - $214,660 = $6,000
ekkarill92 answered 2 years agoRelated Solutions
Retail Method; Gross Profit Method Selected data on merchandise inventory, purchases, and sales for Celebrity Tan...
Retail Method; Gross Profit Method
Selected data on merchandise inventory, purchases, and sales for
Celebrity Tan and Ranchworks Co. are as follows:
Cost
Retail
Celebrity Tan
Merchandise inventory, August 1
$363,000
$472,000
Transactions during August:
Purchases (net)
4,180,000
5,428,000
Sales
5,584,000
Ranchworks Co.
Merchandise inventory, March 1
$221,000
Transactions during March through November:
Purchases (net)
2,943,000
Sales
5,152,000
Estimated gross profit rate
42%
Required:
1. Determine the estimated cost of the
merchandise inventory of Celebrity Tan on August 28 by...
Selected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as...
Selected data on inventory, purchases, and sales for Celebrity
Tan Co. and Ranchworks Co. are as follows:
Cost
Retail
Celebrity Tan Co.
Inventory, August 1
$ 260,000
$ 595,000
Transactions during August:
Purchases (net)
2,263,400
3,475,000
Sales
3,275,000
Ranchworks Co.
Inventory, March 1
$870,000
Transactions during March through November:
Purchases (net)
9,260,000
Sales
15,050,000
Estimated gross profit rate
40%
Required:
1.
Determine the estimated cost of the inventory of Celebrity Tan
Co. on August 31 by the retail method.* Enter...
Retail Method; Gross Profit MethodSelected data on merchandise inventory, purchases, and sales forCelebrity Tan...
Retail Method; Gross Profit MethodSelected data on merchandise inventory, purchases, and sales for
Celebrity Tan and Ranchworks Co. are as follows:CostRetailCelebrity TanMerchandise inventory, August 1$392,000$552,000Transactions during August:Purchases (net)4,507,0006,348,000Sales6,530,000Ranchworks Co.Merchandise inventory, March 1$239,000Transactions during March through November:Purchases (net)3,176,000Sales5,039,000Estimated gross profit rate36%Required:1. Determine the estimated cost of the
merchandise inventory of Celebrity Tan on August 28 by the retail
method, presenting details of the computations.Celebrity TanCost of the Merchandise InventoryAugust 31CostRetail$$$$Ratio of cost to retail price:%$$2a. Estimate the cost of the merchandise...
Selected data on inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows:...
Selected data on inventory, purchases, and sales for Jaffe Co.
and Coronado Co. are as follows:
Cost
Retail
Jaffe Co.
Inventory, February 1
$400,000
$615,000
Transactions during February:
Purchases (net)
4,055,000
5,325,000
Sales
5,100,000
Coronado Co.
Inventory, May 1
$400,000
Transactions during May through October:
Purchases (net)
3,150,000
Sales
4,750,000
Estimated gross profit rate
35%
Required:
1. Determine the estimated cost of the
inventory of Jaffe Co. on February 28 by the retail method,
presenting details of the computations.
Jaffe...
3: Gross profit method. On December 31, 2017 Alex Company's inventory burned. Sales and purchases for...
3: Gross profit method.
On December 31, 2017 Alex Company's inventory burned. Sales and
purchases for the year had been $1,400,000 and $980,000,
respectively. The beginning inventory (Jan. 1, 2017) was $170,000;
in the past Felt's gross profit has averaged 40% of selling
price.
Instructions: Compute the estimated cost of
inventory burned, and give entries as of December 31, 2017 to close
merchandise accounts.
I. Gross Profit Method ABC Company uses the gross profit method to estimate inventory for monthly...
I. Gross Profit
Method
ABC Company uses the gross profit method to estimate inventory
for monthly reporting purposes. Presented below is information for
the month of December.
Cost
Retail
Inventory, Dec 1st.
$ 250,000
$ 520,000
Purchases (gross)
500,000
980,000
Freight-in
25,000
Sales revenue
500,000
Sales returns
8,000
Purchase discounts
10,000
Compute the estimated inventory at cost on December
31st, assuming that the gross profit is 20% of
sales.
b. How does the...
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Dunne Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per Unit
Total
Apr. 3
Inventory
84
$375
$31,500
8
Purchase
168
450
75,600
11
Sale
113
1,250
141,250
30
Sale
71
1,250
88,750
May 8
Purchase
140
500
70,000
10
Sale
84
1,250
105,000
19
Sale
42
1,250
52,500
28
Purchase
140
550
77,000
June 5
Sale
84
1,315
110,460...
The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Rhodes Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per Unit
Total
Apr. 3
Inventory
60
$375
$22,500
8
Purchase
120
450
54,000
11
Sale
80
1,250
100,000
30
Sale
50
1,250
62,500
May 8
Purchase
100
500
50,000
10
Sale
60
1,250
75,000
19
Sale
30
1,250
37,500
28
Purchase
100
550
55,000
June 5
Sale
60
1,315
78,900...
The beginning inventory of merchandise at Rhodes Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Rhodes Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per
Unit
Total
Apr. 3
Inventory
90
$600
$54,000
8
Purchase
180
720
129,600
11
Sale
120
2,000
240,000
30
Sale
75
2,000
150,000
May 8
Purchase
150
800
120,000
10
Sale
90
2,000
180,000
19
Sale
45
2,000
90,000
28
Purchase
150
880
132,000
June 5
Sale
90
2,100
189,000...
The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a...
The beginning inventory of merchandise at Dunne Co. and data on
purchases and sales for a three-month period ending June 30 are as
follows:
Date
Transaction
Number
of Units
Per
Unit
Total
Apr. 3
Inventory
25
$1,200
$30,000
8
Purchase
75
1,240
93,000
11
Sale
40
2,000
80,000
30
Sale
30
2,000
60,000
May 8
Purchase
60
1,260
75,600
10
Sale
50
2,000
100,000
19
Sale
20
2,000
40,000
28
Purchase
80
1,260
100,800
June 5
Sale
40
2,250
90,000...
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