Problem 17.4A Estimating inventory by the gross profit method. LO 17-4 Over the past several years,...

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Problem 17.4A Estimating inventory by the gross profit method. LO 17-4 Over the past several years, Hyman Electronics has had

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Answer 1

Answer #1

Calculation of Estimated Ending Inventory :

Particulars		$
Beginning Inventory		120000
purchases		1200000
Goods available at cost		1320000
sales (at selling price)	1719000
(-) Gross profit	(515700)
Sales at Cost		1203300
Ending Inventory at cost		116700

Calculation of Gross profit Percentage:

particular	$
Beginning Inventory	120000
Add: Purchases	1200000
Goods available for sale	1320000
less: Ending Inventory	141563
Cost of goods sold	1178437

Gross profit = sales - cost of goods sold = 1719000-1178437 = 540563

GP percentage = 540563/1719000*100

= 31.45%

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Answer 2

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