On January 1, The Parts Store had a $370.000 inventory at cost. During the first quarter of the year, It purchased $1,510,000 of merchandise, returned $19,100, and pald freight charges on purchased merchandise totalling $33,600. During the past several years, the store's gross profit on sales has averaged 30%. Under the assumption the store had $1,920,000 of sales during the first quarter of the year, use the gross profit method to estimate its Inventory at the end of the first quarter.
On January 1, The Parts Store had a $370.000 inventory at cost. During the first quarter of the year, It purchased $1,510,000 of merchandise, returned $19,100, and pald freight charges on purchased merchandise totalling $33,600. During the past several years, the store's gross profit on sales has averaged 30%. Under the assumption the store had $1,920,000 of sales during the first quarter of the year, use the gross profit method to estimate its Inventory at the end of the first quarter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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