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 paid 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 paid 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.

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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