On October 31, 2010, a flood at Pamela Company’s only warehouse caused severe damage to its entire inventory. Based on the recent history, Pamela has a gross profit of 25 percent of sales. The following information is available from Pamela’s records for ten months ended October 31, 2010: Inventory, January 1 520,000 Purchases 4,120,000 Purchase returns 60,000 Sales 5,600,000 Sales returns 400,000 Sales allowances 100,000 Using the gross profit method, what is the estimated cost of goods sold for the ten months ended October 31, 2010?
On October 31, 2010, a flood at Pamela Company’s only warehouse caused severe damage to its entire inventory. Based on the recent history, Pamela has a gross profit of 25 percent of sales.
The following information is available from Pamela’s records for ten months ended October 31, 2010:
Inventory, January 1 520,000
Purchases 4,120,000
Purchase returns 60,000
Sales 5,600,000
Sales returns 400,000
Sales allowances 100,000
Using the gross profit method, what is the estimated cost of goods sold for the ten months ended October 31, 2010?
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