A flood destroyed Toshiaki Company's warehouse and all of its inventory. Toshiaki will use the gross profit method to determine its inventory in the warehouse at the time. Toshiaki's management believes that the average of the last two years' gross profit percentage is a good estimate of the gross profit in the current year. Sales last year were $7,700 and $6,100 in the year before. Its cost of goods sold was $4,466 last year and $3,782 the year before. Toshiaki's prior-year balance sheet reported inventory of $450. Before the flood, net sales were $5,200. Toshiaki purchased $3,900 of inventory. Read the requirements. Requirement a. Use the gross profit method to determine Toshiaki's historical gross profit percentage. Identify the appropriate formula and then calculate Toshiaki's historical gross profit percentage for each year. (Round the gross profit percentage to one decimal place, X.X%.) Gross profit % Two Year's Prior % Prior Year % Requirements Round percentages to one decimal place. Use the gross profit method to determine the following: a. What is Toshiaki's historical gross profit percentage? b. What is Toshiaki's estimated cost of goods sold? c. What is Toshiaki's estimated gross profit? d. What is Toshiaki's estimated ending inventory? ×
A flood destroyed Toshiaki Company's warehouse and all of its inventory. Toshiaki will use the gross profit method to determine its inventory in the warehouse at the time. Toshiaki's management believes that the average of the last two years' gross profit percentage is a good estimate of the gross profit in the current year. Sales last year were $7,700 and $6,100 in the year before. Its cost of goods sold was $4,466 last year and $3,782 the year before. Toshiaki's prior-year balance sheet reported inventory of $450. Before the flood, net sales were $5,200. Toshiaki purchased $3,900 of inventory. Read the requirements. Requirement a. Use the gross profit method to determine Toshiaki's historical gross profit percentage. Identify the appropriate formula and then calculate Toshiaki's historical gross profit percentage for each year. (Round the gross profit percentage to one decimal place, X.X%.) Gross profit % Two Year's Prior % Prior Year % Requirements Round percentages to one decimal place. Use the gross profit method to determine the following: a. What is Toshiaki's historical gross profit percentage? b. What is Toshiaki's estimated cost of goods sold? c. What is Toshiaki's estimated gross profit? d. What is Toshiaki's estimated ending inventory? ×
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A flood destroyed Toshiaki Company's warehouse and all of its inventory. Toshiaki will use the gross profit method to determine its inventory in the warehouse at the time. Toshiaki's management believes that the average of the last two years' gross profit percentage is a good estimate of the gross profit in the current
year. Sales last year were $7,700 and $6,100 in the year before. Its cost of goods sold was $4,466 last year and $3,782 the year before. Toshiaki's prior-year balance sheet reported inventory of $450. Before the flood, net sales were $5,200. Toshiaki purchased $3,900 of inventory.
Read the requirements.
Requirement a. Use the gross profit method to determine Toshiaki's historical gross profit percentage.
Identify the appropriate formula and then calculate Toshiaki's historical gross profit percentage for each year. (Round the gross profit percentage to one decimal place, X.X%.)
Gross profit %
Two Year's Prior
%
Prior Year
%
Requirements
Round percentages to one decimal place. Use the gross
profit method to determine the following:
a. What is Toshiaki's historical gross profit percentage?
b. What is Toshiaki's estimated cost of goods sold?
c. What is Toshiaki's estimated gross profit?
d. What is Toshiaki's estimated ending inventory?
×
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