PROBLEMS Problem 13-1 (AICPA Adapted) Avarice Company has a recent gross profit history of 40% of net sales. The following data are available from the accounting records for the three months ended March 31: Inventory - January 1 Purchases Net sales Purchase return Freight in 650,000 3,200,000 4,500,000 75,000 50,000 Using the gross profit method, what is the estimated cost of inventory on March 31? а. 1,125,000 b. 1,120,000 c. 2,025,000 d. 2,700,000

PROBLEMS Problem 13-1 (AICPA Adapted) Avarice Company has a recent gross profit history of 40% of net sales. The following data are available from the accounting records for the three months ended March 31: Inventory - January 1 Purchases Net sales Purchase return Freight in 650,000 3,200,000 4,500,000 75,000 50,000 Using the gross profit method, what is the estimated cost of inventory on March 31? а. 1,125,000 b. 1,120,000 c. 2,025,000 d. 2,700,000

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Description: Using the gross profit method, what is the estimated cost ofThe following data are available from the accounting recordsAvarice Company has a recent gross profit history of 40% ofPROBLEMSProblem 13-1 (AICPA Adapted)Avarice Company has a recent gross

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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Inventory Turnover and Days' Sales in Inventory The Northern Company installed a new inventory management system at the beginning of Year 1. Shown below are data from the company's accounting records as reported by the new system: Year 1 Year 2 Sales revenue $13,500,000 $16,500,000 Cost of goods sold 7,500,000 8,850,000 Beginning inventory 1,200,000 1,260,000 Ending inventory 1,260,000 1,400,000 Calculate the company's (a) inventory turnover and (b) days' sales in inventory for both years. Round to two decimals. Use the rounded answers in your calculations. Year 1 Year 2 (a) Inventory turnover (b) Days' sales in inventory
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