The accounting records of Seattle Outlet include the following
for January:
A physical count determined the cost of inventory on hand at
January 31 to be $42,000. If gross profit amounts
to 25% of net sales, compute the beginning inventory at January
1.
Select one:
a. $10,000
b. $26,000
c. $8,000
d. $24,000
e. $6,000
Homework Answers
Solution:
Net sales = sales - sale discounts = $326000 - $6000 = $320,000
Cost of goods sold = Net Sales - Gross profit = $320000 - ($320000*25%) = $240,000
Cost of net purchases = Purchase + freight in - purchase return and allowances = $260000 + $14000 - $2000 = $272,000
Beginning Inventory = Cost of goods sold + Ending inventory - Cost of net purchases
= $240000 + $42000 - $272000 = $10,000
Hence option "a" is correct.
Add Answer to:
The accounting records of Seattle Outlet include the following
for January:
A physical count determined the...
1.The accounting records of Seattle Outlet include the following for January: A physical count determined the...
1.The accounting records of Seattle Outlet include the following for January: A physical count determined the cost of inventory on hand at January 31 to be $42,000. If gross profit amounts to 25% of net sales, compute the beginning inventory at January 1. Select one: a. $10,000 b. $26,000 c. $8,000 d. $24,000 e. $6,000 2. On 12/31/12, as part of the year-end adjusting journal entries, the Strickland Company accrues three day's wages of $600 ($200 per day). The proper...
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You have been provided with the following selected accounts for
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Inventory, May 1, 2017
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Interest expense
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Purchases
5,853,000
Interest income
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Accounts receivable
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Accounts payable
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Inventory, May 1, 2017
$578,000
Interest expense
$28,000
Purchases
5,853,000
Interest income
20,000
Accounts receivable
757,000
Accounts payable
589,000
Sales
9,378,000
Administrative expenses
800,000
Purchase discounts
36,000
Selling expenses
141,000
Freight in
117,000
Cash
166,000
Land
919,000
Common shares
195,000
Sales returns and allowances
236,000
Monty conducted a physical inventory count on April 30, 2018.
Inventory on hand at that date...
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Flounder Corp. uses a periodic inventory system and reports the following information: sales $1,840,000; sales returns and allowances $125,000; sales discounts $29,000; purchases $879,000; purchase returns and allowances $12,000; purchase discounts $15,000; freight in $14,000; freight out $41,000; beginning inventory $99,000; and ending inventory $78,000. Assuming Flounder uses a multiple-step income statement Calculate net sales Net sales $ Calculate net purchases. Net purchases $ Calculate cost of goods purchased. Cost of goods purchased 5 Calculate cost of goods sold. Cost...
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