Novak Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Novak Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

Inventory, May 1$ 163,800

Purchases (gross)

651,200

Freight-in

29,500

Sales revenue

925,900

Sales returns

66,700

Purchase discounts

11,300

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost

Expert Solution

(a) Computation of estimated inventory at May, 31,
assuming that the gross profit is 25% of net sales

	$	$
Inventory, May 1		163,800.00
Purchases (gross)		651,200.00
Purchase discounts		(11,300.00)
Freight-in		29,500.00
Goods Available for sale		833,200.00
Less:
Sales (at selling price)	925,900.00
Sales returns	(66,700.00)
Net sales	859,200.00
Less gross profit (25% of $859,200)	214,800.00
Sales (at cost)		644,400.00
Inventory, May 31		188,800.00



(b) Computation of estimated inventory at May, 31,
assuming that the gross profit is 25% of cost

	$	$
Inventory, May 1		163,800.00
Purchases (gross)		651,200.00
Purchase discounts		(11,300.00)
Freight-in		29,500.00
Goods Available for sale		833,200.00
Less:
Sales (at selling price)	925,900.00
Sales returns	(66,700.00)
Net sales	859,200.00
Less gross profit (859,200*25/125)	171,840.00
Sales (at cost)		687,360.00
Inventory, May 31		145,840.00

ekkarill92 answered 1 year ago

Whispering Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Whispering Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 171,100 Purchases (gross) 686,700 Freight-in 28,700 Sales revenue 1,067,400 Sales returns 63,300 Purchase discounts 11,300 Compute the estimated inventory at May 31, assuming that the gross profit is 30% of net sales. The estimated inventory at May 31is ______ Compute the estimated inventory at May 31, assuming that the gross profit is 30%...

Ayayai Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Ayayai Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 156,000 Purchases (gross) 576,100 Freight-in 29,300 Sales revenue 998,400 Sales returns 72,100 Purchase discounts 11,900 (a) Your answer is incorrect. Try again. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. The estimated inventory at May 31 $enter the dollar amount of the estimated inventory...

Crane Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Crane Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 171,200 Purchases (gross) 596,600 Freight-in 28,400 Sales revenue 957,000 Sales returns 64,700 Purchase discounts 12,300 Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. The estimated inventory at May 31

Pharoah Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Pharoah Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 156,500 Purchases (gross) 628,400 Freight-in 31,900 Sales revenue 1,029,400 Sales returns 74,600 Purchase discounts 10,800 Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. The estimated inventory at May 31 $enter the dollar amount of the estimated inventory at May 31 eTextbook and Media Compute...

Martinez Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Martinez Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 175,600 Purchases (gross) 617,400 Freight-in 31,700 Sales revenue 973,200 Sales returns 68,100 Purchase discounts 12,900 Part 1 Correct answer iconYour answer is correct. Compute the estimated inventory at May 31, assuming that the gross profit is 20% of net sales. The estimated inventory at May 31 $enter the dollar amount of the estimated...

Splish Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below...

Splish Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 162,100 Purchases (gross) 691,300 Freight-in 30,800 Sales revenue 1,041,700 Sales returns 65,900 Purchase discounts 12,500 Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. The estimated inventory at May 31 ($enter the dollar amount of the estimated inventory at May 31) Compute the estimated...

Exercise 9-14 Nash Company uses the gross profit method to estimate inventory for monthly reporting purposes....

Exercise 9-14 Nash Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 156,000 Purchases (gross) 576,100 Freight-in 29,300 Sales revenue 998,400 Sales returns 72,100 Purchase discounts 11,900 Compute the estimated inventory at May 31, assuming that the gross profit is 35% of net sales. The estimated inventory at May 31 $ Compute the estimated inventory at May 31, assuming that the gross profit...

Exercise 9-14 Crane Company uses the gross profit method to estimate inventory for monthly reporting...

Exercise 9-14 Crane Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 162,000 Purchases (gross) 637,500 Freight-in 28,600 Sales revenue 1,031,100 Sales returns 69,600 Purchase discounts 11,500 Incorrect answer. Your answer is incorrect. Try again. Compute the estimated inventory at May 31, assuming that the gross profit is 20% of net sales. The estimated...

E9-14 (L04) (Gross Profit Method) Mark Price Company uses the gross profit method to estimate inventory...

E9-14 (L04) (Gross Profit Method) Mark Price Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 $ 160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales revenue 1,000,000 Sales returns 70,000 Purchase discounts 12,000 Instructions (a) Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. (b) Compute the estimated inventory at May 31, assuming that the gross profit is...

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....

Question