Question

Whispering Winds Company reported the following information for November and December 2020. November December Cost of goods purchased $521,000 $720,000 Inventory, beginning of month 120,000 103.400 Inventory, end-of-month 103.400 Sales revenue 840,000 958.000 Whispering Winds's ending inventory at December 31 was destroyed in a fire. Compute the gross profit rate for November. (Round answer to 0 decimal places, eg. 15%) Gross profit rate

Answer 1

BANAS 36% Vou Wec ण $ 72o0ro 1 Gross Profit Rate for November 2020 = Explanation : Yalues giren in question Cost of goools puscheused $121000 Inventory beginning of month $120000 Inventory est end of mouth & 103,400 SI &често $ 163,400 956000 Sales Revern end of run tom Gross Profit Route = Gross profit x io Net Sales Cross Profit = sale - Cost of Goods sold Cost of Good soled- Inventory beginning & Cost of horchase u ducentory Ending By butting the values given in question in above formules! we gex Cost of Goods sold = $ 120000 & 521000-103400 Cost of Goods Sold a $ 53760 Cross Pozit - $ 840000 - $53760 Cross Profit 2 & 302400 Gross Profit Ratio a $302400 x 10 $ 840000 G.P. Ratio a 36% 2. Using the loss profit heute for noventer, the estimated cost of intentory lost in the fire - $ 210,280 Estimated cost of ending Inventory

Enplanation : Since the ending inventory of Dec 2020 was destroyed by fire, the cost of in hentay destroyed as fire will be the cost of ending inventory of Dec '2020. Cross profit & Sales & Citrofit Rate = $958000 X 36% 2 & 344880 we know that Gross poft = sale - Cost of loods told . Cost of hoods sold = sale - Goots Profit Cost of Goode sold = $958000 – $ 344880 for dec. (Given) (calculated above) Cost of Goods sold ) & 613120 Cost of Goods sold & Goods sold = opening inventory + opening enventory + Pechases - Ending Invee $ 613120 & 10 3400 + 720000 - Ending Twentory Endling Inventory 24 823,400 - $ 613120 Eveling Tuventry $210,280