Manji Exercise 6-12 Estimating ending inventory-gross profit method LO6On January 1, The Parts Store had a $430,000 inventory at cost. During the first quarter of the year, it purchased $1,570,000 ofmerchandise, returned $22,100, and paid freight charges on purchased merchandise totalling $36,600. During the past several years,the store's gross profit on sales has averaged 30%. Under the assumption the store had $1,980,000 of sales during the first quarter ofthe year, use the gross profit method to estimate its inventory at the end of the first quarter.Ending inventory

Step 1: Cost of goods available for salePurchases$1,570,000Deduct: Purchase returns and allowances…

Answered: Exercise 6-12 Estimating ending…

Financial Accounting: The Impact on Decision Makers

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ISBN:9781305654174

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Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.16E

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