Martinez Corporation’s retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered all the count books and information from the clerical staff, completed the ending inventory calculations, and prepared the following partial income statement for the general manager for Monday morning: Sales $ 2,752,000 Beginning inventory $ 641,000 Purchases 1,550,000 Total goods available for sale 2,191,000 Less ending inventory 641,000 Cost of goods sold 1,550,000 Gross profit $ 1,202,000 The general manager called the controller into her office after quickly reviewing the preliminary statements. “You’ve made an error in the inventory,” she stated. “My pricing all year has been carefully controlled to provide a gross profit of 35%, and I know the sales are correct.” (a) How much should the ending inventory have been? Expected ending inventory = ?
Martinez Corporation’s retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered all the count books and information from the clerical staff, completed the ending inventory calculations, and prepared the following partial income statement for the general manager for Monday morning: Sales $ 2,752,000 Beginning inventory $ 641,000 Purchases 1,550,000 Total goods available for sale 2,191,000 Less ending inventory 641,000 Cost of goods sold 1,550,000 Gross profit $ 1,202,000 The general manager called the controller into her office after quickly reviewing the preliminary statements. “You’ve made an error in the inventory,” she stated. “My pricing all year has been carefully controlled to provide a gross profit of 35%, and I know the sales are correct.” (a) How much should the ending inventory have been? Expected ending inventory = ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Martinez Corporation’s retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered all the count books and information from the clerical staff, completed the ending inventory calculations, and prepared the following partial income statement for the general manager for Monday morning:
| Sales | $ | 2,752,000 | |||||
| Beginning inventory | $ | 641,000 | |||||
| Purchases | 1,550,000 | ||||||
| Total goods available for sale | 2,191,000 | ||||||
| Less ending inventory | 641,000 | ||||||
| Cost of goods sold | 1,550,000 | ||||||
| Gross profit | $ | 1,202,000 |
The general manager called the controller into her office after quickly reviewing the preliminary statements. “You’ve made an error in the inventory,” she stated. “My pricing all year has been carefully controlled to provide a gross profit of 35%, and I know the sales are correct.”
(a)
How much should the ending inventory have been?
| Expected ending inventory = ? |
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