GROUP ACTIVITY Case 2: Moven Company reported that the financial records were destroyed by fire at the end of the current year. However, certain statistical data related to the income statements are available. P200,000 P 3,000,000 P 300,000 Interest Expenses Cost of Goods Sold Sales Discount The beginning inventory was P 500,000 and decreased 20% during the year. Administrative expenses are 25% of cost of goods sold but only 10% of gross sales. Distribution costs represent 70% of the operating expenses. 1. What amount should be reported as gross sales? 2. What total amount should be reported as operating expenses? 3. What amount should be reported as income before tax for the current year?

GROUP ACTIVITY Case 2: Moven Company reported that the financial records were destroyed by fire at the end of the current year. However, certain statistical data related to the income statements are available. P200,000 P 3,000,000 P 300,000 Interest Expenses Cost of Goods Sold Sales Discount The beginning inventory was P 500,000 and decreased 20% during the year. Administrative expenses are 25% of cost of goods sold but only 10% of gross sales. Distribution costs represent 70% of the operating expenses. 1. What amount should be reported as gross sales? 2. What total amount should be reported as operating expenses? 3. What amount should be reported as income before tax for the current year?

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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In its second year of operation, Painter Inc. noticed possible theft of it's inventories. It gathered the following information from its operations: 1st year 2nd Year Purchases 1,200,000 1,500,000 Freight in 100,000 120,000 Purchase returns and allowance 50,000 60,000 Purchase discount 40,000 70,000 Sales 1,300,000 1,800,000 Sales returns and allowance 100,000 250,000 Sales discount 120,000 150,000 Cost of sales 900,000 ??? If the physical ending inventory were valued at 325,000, how much is the estimated loss from inventory theft?
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AFW inc. reported these figures for its fiscal year (amounts in millions): Net sales $2,100 Cost of goods sold $1,140 Ending inventory $330 Suppose AFW later learns that ending inventory was overstated by $8 million. What are the correct amounts for a) Net sales b) Ending inventory c) Cost of goods sold d) Gross profit
LO S Gross Profit Method E9A. David Patel was at home when he received a call from the fire department telling him his store had burned. His business was a total loss. The insurance company asked him to prove his inventory loss. For the year, until the date of the fire, Patel's company had sales of $450,000 and purchases of $280,000. Freight-in amounted to $13,700, and beginning inventory was $45,000. Patel always priced his goods to achieve a gross margin of 40 percent. Compute Patel's estimated inventory loss.
During Year 1, the inventory of Debra's Gift Shop decreased by $32,000. If the income statement for Year 1 reported cost of goods sold of $269,000, purchases during the year must have amounted to: Multiple Choice $301.000 $269,000 $150.500. $237,000. 35
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33.The following data were available for ABC Corp at Nov 7, 20X2:Net purchases ( Jan 1-Nov 7) P75,000Inventory, Jan1 P4,000Gross Sales, P115,000Sales discount, P7,000Gross profit is 50% of costA fire destroyed the warehouse on Nov 7, 20X2 and destroyed 75% of the ending inventory.How much was the loss on fire at Nov. 7, 20x2? 16,125 5,375 5,250 1,750
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