Grouper Corporation’s retail store and warehouse closed for an
entire weekend while the year-end inventory was counted. When the
count was finished, the controller gathered all the count books and
information from the clerical staff, completed the ending inventory
calculations, and prepared the following partial income statement
for the general manager for Monday morning:
Sales | $ | 2,752,000 | |||||
Beginning inventory | $ | 646,000 | |||||
Purchases | 1,550,000 | ||||||
Total goods available for sale | 2,196,000 | ||||||
Less ending inventory | 646,000 | ||||||
Cost of goods sold | 1,550,000 | ||||||
Gross profit | $ | 1,202,000 |
The general manager called the controller into her office after
quickly reviewing the preliminary statements. “You’ve made an error
in the inventory,” she stated. “My pricing all year has been
carefully controlled to provide a gross profit of 36%, and I know
the sales are correct.”
(a)
How much should the ending inventory have been?
Expected ending inventory | $enter the Expected ending inventory in dollars
|
Answer
Grouper Corporation’s retail store and warehouse closed for an entire weekend while the year-end inventory was...
Concord Corporation’s retail store and warehouse closed for an
entire weekend while the year-end inventory was counted. When the
count was finished, the controller gathered all the count books and
information from the clerical staff, completed the ending inventory
calculations, and prepared the following partial income statement
for the general manager for Monday morning:
Sales
$
2,741,000
Beginning inventory
$
642,000
Purchases
1,550,000
Total goods available for sale
2,192,000
Less ending inventory
642,000
Cost of goods sold
1,550,000
Gross profit...
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Travis Company has just completed a physical Inventory count at year-end, December 31 or the current year. Only the items on the shelves, in storage, and in the receiving area were counted and costed on a FIFO basis. The inventory amounted to 565,700. During the audit, the independent CPA developed the following additional Information: a. Goods costing $870 were being used by a customer on a trial basis and were excluded from the inventory count at December 31 of the...
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Read below and answer, Why does a business that has profit of
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