] 5 Computing Gross Profit and Cost Percentages Given Ending Inventory Balances Harris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimates ending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available. Inventory, January 1 (based on physical count) $54,000 Inventory, March 31 (estimated) 24,000 Inventory, June 30 (estimated) 70,800 Purchases, first quarter 150,000 Purchases, second quarter 210,000 Net sales, first quarter 240,000 Net sales, second quarter 216,000 Required Compute the following percentages. a. Gross profit as a percentage of sales for the first quarter. Numerator/Denominator Result $ 540,000/$ 96 b. Gross profit as a percentage of cost for the first quarter. Numerator/Denominator Result 0 / $ 0 = 96 c. Gross profit as a percentage of sales for the second quarter. Numerator/Denominator Result $ 0 / $ 0 % d. Gross profit as a percentage of cost for the second quarter. Numerator/Denominator Result $ 0 / $ 0 % 13 Q
] 5 Computing Gross Profit and Cost Percentages Given Ending Inventory Balances Harris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimates ending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available. Inventory, January 1 (based on physical count) $54,000 Inventory, March 31 (estimated) 24,000 Inventory, June 30 (estimated) 70,800 Purchases, first quarter 150,000 Purchases, second quarter 210,000 Net sales, first quarter 240,000 Net sales, second quarter 216,000 Required Compute the following percentages. a. Gross profit as a percentage of sales for the first quarter. Numerator/Denominator Result $ 540,000/$ 96 b. Gross profit as a percentage of cost for the first quarter. Numerator/Denominator Result 0 / $ 0 = 96 c. Gross profit as a percentage of sales for the second quarter. Numerator/Denominator Result $ 0 / $ 0 % d. Gross profit as a percentage of cost for the second quarter. Numerator/Denominator Result $ 0 / $ 0 % 13 Q
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5
Computing Gross Profit and Cost Percentages Given Ending Inventory Balances
Harris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimates
ending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available.
Inventory, January 1 (based on physical count) $54,000
Inventory, March 31 (estimated)
24,000
Inventory, June 30 (estimated)
70,800
Purchases, first quarter
150,000
Purchases, second quarter
210,000
Net sales, first quarter
240,000
Net sales, second quarter
216,000
Required
Compute the following percentages.
a. Gross profit as a percentage of sales for the first quarter.
Numerator/Denominator
Result
$
540,000/$
96
b. Gross profit as a percentage of cost for the first quarter.
Numerator/Denominator
Result
0 / $
0 =
96
c. Gross profit as a percentage of sales for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
d. Gross profit as a percentage of cost for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
13
Q](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ac88dda-7c15-4588-9472-a73ddf6b6ad2%2F3f3c2ed2-219c-4d55-ba26-f7b41328efce%2Fylduvq1j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:]
5
Computing Gross Profit and Cost Percentages Given Ending Inventory Balances
Harris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimates
ending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available.
Inventory, January 1 (based on physical count) $54,000
Inventory, March 31 (estimated)
24,000
Inventory, June 30 (estimated)
70,800
Purchases, first quarter
150,000
Purchases, second quarter
210,000
Net sales, first quarter
240,000
Net sales, second quarter
216,000
Required
Compute the following percentages.
a. Gross profit as a percentage of sales for the first quarter.
Numerator/Denominator
Result
$
540,000/$
96
b. Gross profit as a percentage of cost for the first quarter.
Numerator/Denominator
Result
0 / $
0 =
96
c. Gross profit as a percentage of sales for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
d. Gross profit as a percentage of cost for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
13
Q
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