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 $59,000. The following information for the month of November was available from company records:
Purchases | $ | 115,000 | |
Freight-in | 3,500 | ||
Sales | 205,000 | ||
Sales returns | 10,000 | ||
Purchases returns | 6,500 | ||
In addition, the controller is aware of $10,500 of inventory that was stolen during November from one of the company's warehouses.
Required:
1. Calculate the estimated inventory at the end of November, assuming a gross profit ratio of 40%.
2. Calculate the estimated inventory at the end of November, assuming a markup on cost of 60%.
Mark-up = 60% of cost
Set the cost of goods sold as = K
Gross profit = K x 60%
= 0.6K
Gross profit = net sales - cost of sales
0.6K = 195,000 - K
1.6K = 195,000
K = 195,000/1.6
= $121,875
Cost of sales = $121,875
Gross profit = net sales - cost of sales
= 195,000 - 121,875
= $73,125
Gross profit = $73,125
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 $59,000. The following information for the m
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 $59,500. The following information for the month of November was available from company records: Purchases $ 120,000 Freight-in 4,000 Sales 230,000 Sales returns 15,000 Purchases returns 9,000 In addition, the controller is aware of $13,000 of inventory that was stolen during November from one of...
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 $60,300. The following information for the month of November was available from company records: Purchases Freight-in Sales Sales returns Purchases returns $128,000 4,800 270,000 23,000 7,500 In addition, the controller is aware of $8,500 of inventory that was stolen during November from one of the...
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 $59,400. The following information for the month of November was available from company records: Purchases $ 119,000 Freight-in 3,900 Sales 225,000 Sales returns 14,000 Purchases returns 8,500 In addition, the controller is aware of $12,500 of inventory that was stolen during November from one of...
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 $59,400. The following information for the month of November was available from company records: Purchases $ 119,000 Freight-in 3,900 Sales 225,000 Sales returns 9,500 Purchases returns 8,500 In addition, the controller is aware of $12,500 of inventory that was stolen during November from one of...
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E 9-11 Gross profit method QL09-2 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: $110,000 Purchases Freight-in Sales 3,000 180,000 Sales returns 5,000 4,000 Purchases returns In addition, the controller is aware of $8,000 of inventory that was stolen...
Please help me with this question! 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 $59,600. The following information for the month of November was available from company records: Purchases $ 121,000 Freight-in 4,100 Sales 235,000 Sales returns 16,000 Purchases returns 4,000 In addition, the controller is aware of $5,000 of inventory that was...
Henderson 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 July was $126,000. The following information for the month of August was available from company records: Purchases Freight-in Sales Sales returns Purchases returns $226,000 5,900 357.000 9,700 5,000 In addition, the controller is aware of $11,000 of inventory that was stolen during August from one of the company's...
Show transcribed image text Expert Answer lohithsan answered this Was this answer helpful? 0 0 1,334 answers 1) Assuming Gross profit ratio of 40%: Particulars Amount ($) Amount ($) Beginning inventory 59,000 Plus: Net Purchases (115,000-6,500) 108500 Freight-in 3,500 Cost of goods available for sale 1,71,000 Less: Cost of goods sold Net sales (205,000-7,500) 197500 Less: Estimated gross profit (197500*40%) -79000 Estimated cost of goods sold -118500 Estimated cost of inventory before theft 52,500 Less: Stolen inventory...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE THANK YOU! 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 $58,800. The following information for the month of November was available from company records: $113,000 3,300 195,000 8,000 5,500 Purchases Freight-in Sales Sales returns Purchases returns In addition, the controller is aware of...