Summer Sportswear estimates its inventory by the gross profit method. The gross profit has averaged 40% of net sales. The company's inventory records reveal the following data: Item Inventory, July 1 Transactions during July: Amount $320,000 Purchases $5,860,000 Purchase discounts $124,000 Purchase returns $56,000 Sales $7,480,000 Sales returns $42,000 Estimate the July 31 inventory, using the gross profit method.

Summer Sportswear estimates its inventory by the gross profit method. The gross profit has averaged 40% of net sales. The company's inventory records reveal the following data: Item Inventory, July 1 Transactions during July: Amount $320,000 Purchases $5,860,000 Purchase discounts $124,000 Purchase returns $56,000 Sales $7,480,000 Sales returns $42,000 Estimate the July 31 inventory, using the gross profit method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 2RE: On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the...

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