Sporting Pro wants to prepare interim financial statements for the first quarter of 2023 but would like to avoid making a physical count of inventory. During the last five years, the company's gross profit rate has averaged 29%. The following information for the year's first quarter is available from its records: January 1 beginning inventory Purchases Purchase returns Transportation-in Sales Sales returns $ 270,260 915,200 12,450 6,300 1,131,150 9,150 Required: Use the gross profit method to prepare an estimate of the company's March 31 inventory.

Sporting Pro wants to prepare interim financial statements for the first quarter of 2023 but would like to avoid making a physical count of inventory. During the last five years, the company's gross profit rate has averaged 29%. The following information for the year's first quarter is available from its records: January 1 beginning inventory Purchases Purchase returns Transportation-in Sales Sales returns $ 270,260 915,200 12,450 6,300 1,131,150 9,150 Required: Use the gross profit method to prepare an estimate of the company's March 31 inventory.

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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Required information [The following information applies to the questions displayed below.] A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 440 units. Ending inventory at January 31 totals 170 units. Beginning inventory on January 1 Units 400 Unit Cost $ 3.90 Purchase on January 9 90 Purchase on January 25 120 4.10 4.20 Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. Perpetual FIFO: Goods purchased Cost of Goods Sold Inventory Balance Date # of units Cost per unit # of units sold Cost per Cost of Goods unit Sold # of units Cost per unit Inventory Balance January 1 January 9 Total January 9 January 25 Total January 25 January 26 Total January 26
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2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
Opening and closing inventory balances and purchases for the month of October 2020 for Haadiyah Hearing Ltd are as follows: Units Per unit Inventory, 1 October 7,000 $4.00 Purchase, 3 October 8,000 $4.10 Purchase, 15 October 11,000 $4.20 Purchase, 20 October 15,000 $4.25 Inventory, 31 October 20,000 - Required: Determine the cost of goods sold for October under each of the following cost flow assumptions: FIFO Weighted average LIFO
A small firm has a beginning inventory of $52,000 as of January 1, 2020, and the following accounting information. Month Ending Inventory Cost of Goods Sold January 2020 $75,000 $225,000 February 2020 $56,000 $325,000 March 2020 $25,000 $240,000 April 2020 $85,000 $325,000 May 2020 $125,000 $460,000 June 2020 $95,000 $220,000 July 2020 $72,000 $85,000 August 2020 $45,000 $156,000 September 2020 $52,500 $220,000 October 2020 $120,000 $265,000 November 2020 $162,500 $100,000 December 2020 $255,000 $350,000 Compute the monthly inventory turnover ratio for each of the twelve months. What are the annual cost of goods sold and the average inventory for the year? Compute the annual inventory turnover ratio. What can the purchasing department do to improve the firm’s performance?
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