cesQS 5-26B (Algo) Estimating inventories-gross profit method LO P4Confucius Bookstore's inventory is destroyed by a fire on September 5. The following data for the current year are available from theaccounting records.Beginning inventory, January 1January 1 through September 5 purchases (net).January 1 through September 5 sales (net)Current year's estimated gross profit rateEstimate the cost of the inventory destroyed.Beginning inventoryNet cost of goods purchasedCost of goods available for saleEstimated cost of goods soldEstimated September 5 inventory destroyed$$230,000230,000$ 230,000$ 342,000$ 684,000< Prev39%14 of 14 HMacBook ProNext >

INTRODUCTION: The cost of goods sold is the entire amount paid by your company as a cost directly…

Answered: QS 5-26B (Algo) Estimating…

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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Question VI - On January 20, 2011, the records of the Stewart Company revealed the following information: Purchases discounts taken $5,800 3,800 Freight-in Sales returns 6,600 Inventory, July 1, 2010 Purchases, July 1, 2010-January 20, 2011 Sales, July 1, 2010-January 20, 2011 Purchases returns $ 53,600 368,000 583,000 11,200 A fire destroyed the entire inventory on January 20, 2011 except for purchases in transit, FOB shipping point of $6,000, and goods having a selling price of $4,700 that were salvaged from the fire. The salvaged goods had an estimated cost of $2,900. The average gross profit on net sales in previous periods was 40%. 1. Compute the cost of the inventory lost in the fire.
Problems Problem 1 Gross Margin Method: Inventory Burned, Indemnity. Word Wholesale Company's warehouse burned on April 1, 20X5. The following information (up to the date of the fire) was taken from the records of the company; inventory, January 1, P30,0003; gross sales, P160,000; purchases, P90,000%3; sales returns (restored to stock), P5,000; purchase returns and allowances, P2,000; and freight-in, P8,000. The cost of goods sold and gross margin for the past three years were: Cost of Goods Sold P500,000 460,000 500,000 Gross Margin P125,000 120,000 120,000 Year 20X2 20X3 20X4 Required: 1. Estimate the cost of the inventory destroyed in the fire. 2. Under what conditions would your response to (1) above be questionable? 3. The insurance company pays indemnity on market value at the date of the fire. What amount would you recommend that Word submit as an insurance claim? Explain.
Exercise 5-19 (Algo) Inventory turnover and days' sales in inventory LO A3 The following is information for Palmer Company. Year 3 $ 613,825 99,400 Cost of goods sold Ending inventory Year 2 $ 396,650 89,750 Use the above information to compute inventory turnover for Year 3 and Year 2, and its days' sales in inventory at December 31, Year 3 and Year 2. From Year 2 to Year 3, did Palmer improve its (a) inventory turnover and (b) days' sales in inventory? Inventory turnover Days' sales in inventory Year 1 $361,300 94,500 Use the above information to compute inventory turnover for Year 2, and its days' sales in inventory at December 31, Year 2. Numerator / Denominator Inventory turnover Days' sales in inventory Use the above information to compute inventory turnover for Year 3, and its days' sales in inventory at December 31, Year 3. Numerator / Denominator Ratio < Prev 0 0 4 of 9 # Did Palmer improve its (a) inventory turnover from Year 2 to Year 3 and (b) days' sales in inventory from…
ACC 301 Gross Profit Method Raynor Company lost most of its inventory in a fire just before the company was to take it's year-end physical inventory. The company's records disclosed the following. Beginning inventory Purchases Purchase returns 80,000 290,000 28,000 Gross profit based on selling price = 35% Sales revenue Sales returns 415,000 21,000 Merchandise with a selling price of $80,000 was not damaged by the fire. The damaged merchandise has a net realizable value of $8,150. Required: Prepare a schedule computing the fire loss (Do not use the retail inventory method)
Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Purchased 400 units @ $4 = Purchased 90 units $5 = $ 1,600 450 January 20 April 21 July 25 September 19 Purchased 250 units @ $7 = Purchased 60 units @ $9 = During the year, The Shirt Shop sold 650 T-shirts for $14 each. Exercise 5-5 (Algo) Part a Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Ending inventory FIFO $ LIFO 450 1,750 540 Weighted Average
PROBLEM 17 On January 15, 2020, a strong monsoon hit the country and destroyed all the inventory of Aeirron Company stored in the warehouse. The following information is available from the records of the company's periodic inventory system: ww Beginning inventory Purchases, January1 to January 15, 2020 Sales, January 1 to January 15, 2020 P1,000.000 500,000 800,000 The following are the past performance of Aeirron Company: 2019 2018 Sales P4,500,000 P4,100,000 Cost of Sales 2,300,000 2,500,000 Requirements: 1. Compute the gross profit rate of the company for the pastyears. 2. Compute the inventory lost in monsoon.
Errors in Inventory Counts The following information was taken from the records of Tinker Enterprises: Year 2 Year 1 $105,000 $126,000 Beginning Inventory Cost of goods purchased 840,000 882,000 Cost of goods available for sale 945,000 1,008,000 126,000 115,500 $819,000 $892,500 Ending inventory Cost of goods sold The following two errors were made in the physical inventory counts: 1. Year 1 ending inventory was understated by $16,800 2. Year 2 ending inventory was overstated by $8,400 Compute the correct cost of goods sold for both years. Year 1 Year 2 Cost of goods sold $ 802,200 $ 0
Ore
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