Henderson Company uses the gross profit method to estimate ending inventory and cost of goodssold when preparing monthly financial statements required by its bank. Inventory on hand at theend of July was $118,000. The following information for the month of August was available fromcompany records:PurchasesFreight-inSalesSales returns$210,0004,300341,0008,1003,400Purchases returnsIn addition, the controller is aware of $11,000 of inventory that was stolen during August from one ofthe company's warehouses.Required:1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 35%.2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.Estimated ending inventoryEstimated ending inventory1.2.

Name: Henderson Company uses the gross profit method to estimate ending inv
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Description: Henderson Company uses the gross profit method to estimate ending inventory and cost of goodssold when preparing monthly financial statements required by its bank. Inventory on hand at theend of July was $118,000. The following information for the m

1. Beginning Inventory 118,000 Add: Net purchases (210000-3400) 206,600…

Answered: Required: 1. Calculate the estimated…

Business

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Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 35%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.

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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