warehouse of Marlon Corporation c
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 10
On September 1, 2014, a fire broke out in the warehouse of Marlon Corporation destroying all inventories
and majority of its accounts records. The following information were made available from salvaged
records. All sales and purchases are made on account:
Inventories, January 1
Accounts receivable, January 1
Accounts receivable, September 1
Accounts payable, January 1
Accounts payable, September 1
Collections from customers, Jan. 1 to Sept. 1
1,150,800
1,044,720
1,031,120
705,120
982,800
6,030,400
3,900,000
390,000
Payment to suppliers, Jan. 1 to Sept. 1
Goods out on consignment on Sept. 1 at cost
Goods in transit at Sept. 1, purchase FOB shipping
point, included in the Sept. 1 accounts payable
I.
The following information was also made available about the past years operations:
139,000
2011
5,008,000
1,502,400
2012
2013
Sales
5,640,000
1,466,400
5,440,000
1,849,600
Gross profit
Required:
1. What is the average gross profit ratio based on its prior years' sale?
2. What is the company's total sales for period January 1 to September 1?
3. What is the company's total purchases from January 1 to September 1?
4. What is the company's estimated inventory on September 1?
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