Kids Costumes estimates its inventory by the gross profit method.The gross profit has averaged 39% of net sales. The company'sinventory records reveal the following data:Inventory, July 1$268,000Transactions during July:Purchases7,661,000Purchase discounts171,000Purchase returns32,000Sales8,788,00035,000Sales returns1. Estimate the July 31 inventory using the gross profit method.2. Prepare the July income statement through gross profit for KidsCostumes.

Step1. Estimate the July 31 Inventory Using the Gross Profit MethodThe gross profit method estimates…

Answered: Kids Costumes estimates its inventory…

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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Assume the perpetual inventory system is used unless stated otherwise. Round all numbers to the nearest whole dollar unless stated otherwise. Estimating sales returns On December 31, Jack Photography Supplies estimated that approximately 2% of merchandise sold will be returned. Sales Revenue for the year was $80,000 with a cost of $48,000. Journalize the adjusting entries needed to account for the estimated returns.
The records of Culver's Boutique report the following data for the month of April. Sales revenue $103,800 Purchases (at cost) $43,800 Sales returns 1,900 Purchases (at sales price) 92,200 Markups 9,300 Purchase returns (at cost) 1,900 Markup cancellations 1,600 Purchase returns (at sales price) 2,800 Markdowns 9,600 Beginning inventory (at cost) 26,550 Markdown cancellations 2,700 Beginning inventory (at sales price) 44,400 Freight on purchases 2,300 Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using conventional retail inventory method %24
Adler Inc. has the following information for four inventory items, reported using the retail method, on July 31. The normal profit margin is 20% of selling price. Cost to Sell Cost per Replacement Cost Item Selling Price per No. Quantity Unit per Unit Unit per Unit #101 80 $20 $5 $15 $12 #102 50 22 4 14 15 #211 30 35 5 30 28 #212 40 40 8 28 35 Required Determine the inventory cost to report on the balance sheet on July 31 assuming that the company applies the lower of cost or market value rule to each individual inventory item. Note Do not use any negative signs with your answers. Per Unit Total Total Cost Cost to Cost Replacement Total Sell per Replacement Ceiling Floor Market Cost Lower of Selling Price Item per per No. Quantity Unit Unit Unit per Unit Cost #101 80 $20 $5 $15 $12 $ 0 $ #102 50 22 #211 30 35 45 14 15 0 30 28 0 #212 40 40 8 28 35 0 000 O 0 ос 00 Cost or Market 0 $ 0 $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0
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A company uses a periodic inventory system. On April 1, the company had 9 items of beginning inventory with a cost of $13 per unit. On April 18, the company purchased 15 units at $14 per unit. Then, on April 29, the company sold 14 units. Using weighted average, the cost of the 14 units sold is closest to Cost of the units sold
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Skysong, Inc. has the following inventory data: July 1 Beginning inventory 33 units at $16 $528 7 Purchases 115 units at $17 1955 22 Purchases 16 units at $18 288 $2771 A physical count of merchandise inventory on July 30 reveals that there are 41 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is
The records of Vaughn's Boutique report the following data for the month of April. Sales revenue $97,100 Purchases (at cost) $47,800 Sales returns 2,100 Purchases (at sales price) 86,100 Markups 10,400 Purchase returns (at cost) 2,100 Markup cancellations 1,500 Purchase returns (at sales price) 3,100 Markdowns 10,200 Beginning inventory (at cost) 24,251 Markdown cancellations 2,900 Beginning inventory (at sales price) 44,800 Freight on purchases 2,500 Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, eg. 78% and final answer to 0 decimal places, eg. 28,987.) Ending inventory using conventional retail inventory method %$4
Using the selected year-end account balances at December 31, 2014, for Lifeline General Store that follow, prepare a multistep 2014 income statement. Show detail of net sales. The company uses the periodic inventory system. Beginning merchandise inventory was $28,000; ending merchandise inventory is $21,000. Account Name Debit CreditSales $309,000Sales Returns and Allowances $ 15,200Purchases 114,800Purchases Returns and Allowances 7,000Freight-In 5,600Selling Expenses…
Universal Suppliers had sales of $475,000 in the month of June. Use the retail method to estimate the value of the inventory (in $) as of June 30 given the following financial information: Universal SuppliersFinancial HighlightsJune 1–June 30 Cost Retail Beginning Inventory $304,371 $583,900 Net Purchases (June) 109,137 226,900 $
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The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B. Date Transaction Number of units Per unit ($) Total ($) April 3 Inventory 25 1.200 30.000 8 Purchase 75 1.240 93.000 11 Sale 40 2.000 80.000 30 Sale 30 2.000 60.000 May 8 Purchase 60 1.260 76.500 10 Sale 50 2.000 100.000 19 Sale 20 2.000 40.000 28 Purchase 80 1.260 100.800 June 5 Sale 40 2.250 90.000 16 Sale 25 2.250 56.250 21 Purchase 35 1.264 44.240 28 Sale 44 2.250 99.000 Instructions1. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period, using the first-in, first-out method and the periodic inventory system.2. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period, using the last-in, first-out method and the periodic inventory system.3. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period,…

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