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Accounting
Larkspur Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.) The estimated inventory at May 31 The estimated inventory at May 31 Inventory, May 1   $ 162,000 Purchases (gross)   637,500 Freight-in   28,600 Sales revenue   1,031,100 Sales returns   69,600 Purchase discounts   11,500

Larkspur Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales. Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.) The estimated inventory at May 31 The estimated inventory at May 31 Inventory, May 1   $ 162,000 Purchases (gross)   637,500 Freight-in   28,600 Sales revenue   1,031,100 Sales returns   69,600 Purchase discounts   11,500

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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Larkspur Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. (Round percentage of sales to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)

The estimated inventory at May 31
The estimated inventory at May 31
Inventory, May 1   $ 162,000
Purchases (gross)   637,500
Freight-in   28,600
Sales revenue   1,031,100
Sales returns   69,600
Purchase discounts   11,500
     
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