(Gross Profit Method) Astaire 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 $160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales 1,000,000 Sales returns 70,000 Purchase discounts 12,000 (a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales. Inventory $ (b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. Inventory $
(Gross Profit Method) Astaire 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 $160,000 Purchases (gross) 640,000 Freight-in 30,000 Sales 1,000,000 Sales returns 70,000 Purchase discounts 12,000 (a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales. Inventory $ (b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. Inventory $
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 46E
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Transcribed Image Text:(Gross Profit Method)
Astaire 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 $160,000
Purchases (gross) 640,000
Freight-in 30,000
Sales 1,000,000
Sales returns 70,000
Purchase discounts 12,000
(a) Compute the estimated inventory at May 31,
assuming that the gross profit is 25% of sales.
Inventory $
(b) Compute the estimated inventory at May 31,
assuming that the gross profit is 25% of cost.
Inventory $
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