Question
In: Accounting
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 the retail method, presenting details of the computations.
| Celebrity Tan | |||
| Cost of the Merchandise Inventory | |||
| August 31 | |||
| Cost | Retail | ||
| $ | $ | ||
| $ | $ | ||
| Ratio of cost to retail price: | % | ||
| $ | |||
| $ | |||
2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations.
| Ranchworks Co. | ||
| Cost of the Merchandise Inventory | ||
| November 30 | ||
| Cost | ||
| $ | ||
| $ | ||
| $ | ||
| $ | ||
2b. Assume that Ranchworks Co. took a physical
inventory on November 30 and discovered that $165,300 of
merchandise was on hand. What was the estimated loss of inventory
due to theft or damage during March thru November?
$
Solutions
Expert Solution
| 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 Tan | |||
| Cost of the Merchandise Inventory | |||
| August 31 | |||
| Cost | Retail | ||
| Merchandise inventory, August 1 | $363,000.00 | $472,000.00 | |
| Net purchases | $4,180,000.00 | $5,428,000.00 | |
| Merchandise available for sale | $4,543,000.00 | $5,900,000.00 | |
| Ratio of cost to retail price: | 77.00% | ||
| Less: Sales | $5,584,000.00 | ||
| Merchandise inventory, August 31, at retail | $316,000.00 | ||
| Merchandise inventory, at estimated cost = $316,000 x 77% | $243,320.00 | ||
| 2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. | |||
| Ranchworks Co. | |||
| Cost of the Merchandise Inventory | |||
| November 30 | |||
| Merchandise inventory, March 1 | $221,000.00 | ||
| Net purchases | $2,943,000.00 | ||
| Merchandise available for sale | $3,164,000.00 | ||
| Sales | $5,152,000.00 | ||
| Less: Estimated gross profit ($5,152,000 × 42%) | $2,163,840.00 | ||
| Estimated cost of merchandise sold | $2,988,160.00 | ||
| Estimated merchandise inventory, November 30 | $175,840.00 | ||
| 2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $165,300 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November? | |||
| Estimated merchandise inventory, November 30 | $175,840.00 | ||
| Physical inventory count, November 30 | $165,300.00 | ||
| Estimated loss due to theft or damage,March 1–November 30 | $10,540.00 | ||
ekkarill92 answered 1 year agoRelated Solutions
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; 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...
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.
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...
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, 2016,
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...
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
72
$225
$16,200
8
Purchase
144
270
38,880
11
Sale
96
750
72,000
30
Sale
60
750
45,000
May 8
Purchase
120
300
36,000
10
Sale
72
750
54,000
19
Sale
36
750
27,000
28
Purchase
120
330
39,600
June 5
Sale
72
790
56,880...
The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for...
The beginning inventory of merchandise at Keats Office Supplies
and data on purchases and sales for a three-month period ending May
31, 2016, are as follows:
Date
Transaction
Number
of Units
Per Unit
Total
March 1
Inventory
84
$225
$18,900
10
Purchase
168
270
45,360
28
Sale
112
750
84,000
30
Sale
70
750
52,500
April 5
Purchase
140
300
42,000
10
Sale
84
750
63,000
16
Sale
42
750
31,500
28
Purchase
140
330
46,200
May 5
Sale
84...
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