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Cullumber Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?

Cullumber Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?

FINANCIAL ACCOUNTING
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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Cullumber Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?
Transcribed Image Text:Cullumber Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?
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