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Mark Price 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 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $ 160,000 640,000 30,000 1,000,000 70,000 12,000 Instructions a. Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. b. Compute the estimated inventory at May 31, assuming that the gross profit is 301⁄3% of cost

Mark Price 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 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $ 160,000 640,000 30,000 1,000,000 70,000 12,000 Instructions a. Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. b. Compute the estimated inventory at May 31, assuming that the gross profit is 301⁄3% of cost

Managerial Accounting: The Cornerstone of Business Decision-Making
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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 Mark Price 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 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $ 160,000 640,000 30,000 1,000,000 70,000 12,000 Instructions a. Compute the estimated inventory at May 31, assuming that the gross profit is 30% of sales. b. Compute the estimated inventory at May 31, assuming that the gross profit is 301⁄3% of cost

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