Question
In: Accounting
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods...
Royal Gorge Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of October was $59,100. The following information for the month
of November was available from company records:
| Purchases | $ | 116,000 | |
| Freight-in | 3,600 | ||
| Sales | 210,000 | ||
| Sales returns | 8,000 | ||
| Purchases returns | 7,000 | ||
In addition, the controller is aware of $11,000 of inventory that
was stolen during November from one of the company's
warehouses.
Required:
1. Calculate the estimated inventory at the end of
November, assuming a gross profit ratio of 35%.
2. Calculate the estimated inventory at the end of
November, assuming a markup on cost of 100%.
Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 35%.
|
Calculate the estimated inventory at the end of November, assuming a markup on cost of 100%.
|
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Solutions
Expert Solution
Answer of part 1:
Answer of Part 2:
Gross Profit, % of Sales = Gross Profit, % of Cost / (100% +
Gross Profit, % of Cost)
Gross Profit, % of Sales = 100% / (100% + 100%)
Gross Profit, % of Sales = 100% / 200%
Gross Profit, % of Sales = 50%
ekkarill92 answered 1 year agoRelated Solutions
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods...
Royal Gorge Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of October was $59,300. The following information for the month
of November was available from company records:
Purchases
$
118,000
Freight-in
3,800
Sales
220,000
Sales returns
9,000
Purchases returns
8,000
In addition, the controller is aware of $12,000 of inventory that
was stolen during November from one of...
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,500. The following information for the month of November was available from company records:
Purchases.............................$110,000
Freight-in.....................................3,000
Sales..........................................180,000
Sales returns................................5,000
Purchases returns......................4,000
In addition, the controller is aware of $8,000 of inventory that was stolen during November from one of the company’s warehouses.
Required:
1....
Royal Gorge Company uses the gross profit method to estimateending inventory and cost of goods...
Royal Gorge Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of October was $60,100. The following information for the month
of November was available from company records: Purchases$126,000 Freight-in4,600 Sales260,000 Sales returns7,500 Purchases returns6,500In addition, the controller is aware of $7,500 of inventory that
was stolen during November from one of the company’s
warehouses.1.Calculate the estimated inventory at the end of November,
assuming...
Royal Gorge Company uses the gross profit method to estimateending inventory and cost of goods...
Royal Gorge Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of October was $60,100. The following information for the month
of November was available from company records:Purchases$126,000Freight-in4,600Sales260,000Sales returns7,500Purchases returns6,500In addition, the controller is aware of $7,500 of inventory that
was stolen during November from one of the company's
warehouses.Required:1. Calculate the estimated inventory at the end of
November,...
Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold...
Henderson Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of July was $125,000. The following information for the month
of August was available from company records:
Purchases
$
224,000
Freight-in
5,700
Sales
355,000
Sales returns
9,500
Purchases returns
4,800
In addition, the controller is aware of $12,000 of inventory that
was stolen during August from one of the...
Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold...
Henderson Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of July was $122,000. The following information for the month
of August was available from company records: Purchases $ 218,000
Freight-in 5,100 Sales 349,000 Sales returns 8,900 Purchases
returns 4,200 In addition, the controller is aware of $12,000 of
inventory that was stolen during August from one of the...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2018 are as
follows:
Cost
Retail
Beginning inventory
$
89,000
$
179,000
Purchases
352,000
579,000
Freight-in
8,900
Purchase returns
6,900
10,900
Net markups
15,900
Net markdowns
11,900
Normal spoilage
2,900
Abnormal spoilage
4,512
7,900
Sales
539,000
Sales returns
9,900
The company records sales net of employee discounts. Discounts for
2018 totaled $3,900.
Required:
1. Estimate Sparrow’s ending inventory and cost of
goods...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2016 are as
follows:
Cost Reatail
Begining inventory. $90,000. $180,000
Purchases 335,000. 580,000
Freight in 9,000
Purchase returns. 7,000 11,000
Net markups 16,000
Net markdowns 12,000
Normal spoilage 3,000
Abnormal spoliage. 4,800 8,000
Sales 540,000
Sales returns 10,000
The company records sales net of employee discounts. Discounts
for 2016 totaled $4,000.
Required:
Estimate Sparrow’s ending inventory and cost of goods sold...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2021 are as
follows: Cost Retail Beginning inventory $ 83,000 $ 173,000
Purchases 368,000 573,000 Freight-in 8,300 Purchase returns 6,300
10,300 Net markups 15,300 Net markdowns 11,300 Normal spoilage
2,300 Abnormal spoilage 4,405 7,300 Sales 533,000 Sales returns
9,300 The company records sales net of employee discounts. Employee
discounts for 2021 totaled $3,300.
Required: 1. Estimate Sparrow’s ending inventory and cost of...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2016 are as
follows: Cost Retail Beginning inventory $ 92,000 $ 182,000
Purchases 360,000 582,000 Freight-in 9,200 Purchase returns 7,200
11,200 Net markups 16,200 Net markdowns 12,200 Normal spoilage
3,200 Abnormal spoilage 4,840 8,200 Sales 542,000 Sales returns
10,200 The company records sales net of employee discounts.
Discounts for 2016 totaled $4,200. Required: 1. Estimate Sparrow’s
ending inventory and cost of goods...
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