St corporation lost its inventory in a fire and they have asked you to calculate the value of Ending Inventory based on the following info: Beginning inventory $250,000 , Sales $980,000 , Purchases $590.000, Sales returns $55,000 , Purchase returns $30,000 . Average Gross Profit margin 55% . Show All work!
Net sales = sales - sales returns
=980000-55000
= $ 925,000
Cost of goods sold =net sales - Gross profit margin
= 925,000 - 55%
=$ 416,250
Net purchases = purchases - purchase returns
= 590000-30000
= $ 560,000
Closing stock = (Opening stock + Net purchases ) - COGS
= (250,000 + 560,000 ) - 416250
= $ 393,750
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Problem 8-10
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$
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