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Beginning inventory = $167,300
Purchase = $580,800
Freight in = $32,100
Sales revenue = $979,300
Sales returns = $73,300
Purchase discount = $11,300
Gross profit = 25% of net sales
Net Sales = Sales - Sales returns
= 979,300-73,300
= $906,000
Gross profit = 25% of net sales
= 906,000 x 25%
= $226,500
Cost of goods sold = Net Sales - Gross profit
= 906,000-226,500
= $679,500
Cost of goods sold = Beginning inventory + Purchases + Freight in - Purchase discount - Ending inventory
679,500 = 167,300+580,800+32,100-11,300- Ending inventory
Ending inventory = $89,400
Gross profit = 25% of cost
Let the cost be $100
Gross profit = $25
Sales = Cost + Gross profit
= 100+25
= $125
Gross profit on sales = Gross profit/ Sales
= 25/125
= 20%
Gross profit = 20% of net sales
= 906,000 x 20%
= $181,200
Cost of goods sold = Net Sales - Gross profit
= 906,000-181,200
= $724,800
Cost of goods sold = Beginning inventory + Purchases + Freight in - Purchase discount - Ending inventory
724,800 = 167,300+580,800+32,100-11,300- Ending inventory
Ending inventory = $44,100
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Exercise 9-14 Stellar Company uses the gross profit method to estimate inventory for monthly reporting purposes....
Exercise 9-14
Vaughn 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
$ 167,300
Purchases (gross)
580,800
Freight-in
32,100
Sales revenue
979,300
Sales returns
73,300
Purchase discounts
11,300
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
LINK TO...
Bridgeport 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 $enter the dollar amount of the estimated inventory at May 31 eTextbook and Media Compute...
Exercise 9-14 Vaughn 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 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts 174,600 607,000 29,300 983,300 67,700 12,700 Compute the estimated inventory at May 31, assuming that the gross profit is 20% of net sales. The estimated inventory at May 31 LINK TO TEXT VIDEO: SIMILAR EXERCISE Compute the estimated inventory at May 31, assuming...
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