2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details ofthe computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign.Line Item DescriptionInventory, March 1Net purchasesRanchworks Co.Estimated Cost of InventoryNovember 30Merchandise available for saleSalesEstimated gross profitEstimated cost of goods soldEstimated inventory, November 30$Cost15,800,0006,004,000 X$Cost880,0009,500,00010,380,0009,796,000 X584,000 Retail method; gross profit methodSelected data on inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks Co. are as follows:RetailCelebrity Tan Co.Inventory, August 1Transactions during August:Purchases (net)SalesRanchworks Co.Inventory, March 1Transactions during March through November:Purchases (net)SalesEstimated gross profit rateRequired:Line Item DescriptionInventory, August 1✔ ✔Net purchasesMerchandise available for saleRatio of cost to retail price:SalesInventory, August 31, at retailCost1. Determine the estimated cost of the inventory of Celebrity Tan Co. on August 31 by the retail method, presenting detailsof the computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign.$300,000 $575,000Inventory, August 31, at estimated cost2,021,900 3,170,0003,250,000$880,0009,500,00015,800,00038%Celebrity Tan Co.Estimated Cost of InventoryAugust 31Ratio62 ✓ %$Cost300,0002,021,9002,321,900$$Retail575,0003,170,0003,745,0003,250,000 X495,000306,900

The gross profit method estimates the value of inventory by applying the company's historical gross…

2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Line Item Description Inventory, March 1 ✔ Net purchases ✓ Merchandise available for sale ✓ Sales- Ranchworks Co. Estimated Cost of Inventory November 30 Estimated gross profit Estimated cost of goods sold V Estimated inventory, November 30 ✔ Cost 15,800,000 6,004,000 X Cost 880,000 9,500,000 10,380,000 ✓ 9,796,000 X 584,000 ✓

2a. Estimate the cost of the inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Line Item Description Inventory, March 1 ✔ Net purchases ✓ Merchandise available for sale ✓ Sales- Ranchworks Co. Estimated Cost of Inventory November 30 Estimated gross profit Estimated cost of goods sold V Estimated inventory, November 30 ✔ Cost 15,800,000 6,004,000 X Cost 880,000 9,500,000 10,380,000 ✓ 9,796,000 X 584,000 ✓

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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