### Wayward Company Inventory Estimation for the First Quarter**Objective:** Wayward Company intends to prepare interim financial statements for the first quarter without conducting a physical inventory count. The company has a historical gross profit rate of 40%. The available financial data for the first quarter is as follows:- **Beginning inventory, January 1:** $430,260- **Cost of goods purchased:** $1,069,050- **Sales:** $1,321,150- **Sales returns:** $10,750**Task:** Estimate the company's ending inventory for the first quarter using the gross profit method.**Calculation Details:**1. **Beginning Inventory, January 1:** - $430,2602. **Net Cost of Goods Purchased:** - $1,069,0503. **Cost of Goods Available for Sale:** $ \text{Beginning Inventory} + \text{Net Cost of Goods Purchased} = 430,260 + 1,069,050 = 1,499,310 $4. **Estimated Cost of Goods Sold:** - Calculated using the gross profit rate: - Gross profit = 40% of sales = $ 0.40 \times 1,321,150 = 528,460 $ - Cost of Goods Sold (COGS) = Sales - Gross Profit = $ 1,321,150 - 528,460 = 792,690 $5. **Estimated March 31 Inventory:** $ \text{Cost of Goods Available for Sale} - \text{Estimated Cost of Goods Sold} = 1,499,310 - 792,690 = 706,620 $Using the gross profit method, the estimated ending inventory as of March 31 is **$706,620**.This method provides an efficient estimate of inventory without a physical count, using historical financial data and trends.

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Description: ### Wayward Company Inventory Estimation for the First Quarter**Objective:** Wayward Company intends to prepare interim financial statements for the first quarter without conducting a physical inventory count. The company has a historical gross pro

The Gross Profit Method, sometimes called the Gross Method, is an accounting technique used to…

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Wayward Company wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Wayward's gross profit rate averages 40%. The following information for the first quarter is available from its records. Beginning inventory, January 1 Cost of goods purchased Sales Sales returns Required: Use the gross profit method to estimate the company's first-quarter ending inventory. Beginning inventory, January 1 Net cost of goods purchased Cost of goods available for sale Estimated cost of goods sold Estimated March 31 inventory $ $ 430,260 1,069,050 1,321,150. 10,750 $ 430,260 1,069,050 1,499,310 786,240

Wayward Company wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Wayward's gross profit rate averages 40%. The following information for the first quarter is available from its records. Beginning inventory, January 1 Cost of goods purchased Sales Sales returns Required: Use the gross profit method to estimate the company's first-quarter ending inventory. Beginning inventory, January 1 Net cost of goods purchased Cost of goods available for sale Estimated cost of goods sold Estimated March 31 inventory $ $ 430,260 1,069,050 1,321,150. 10,750 $ 430,260 1,069,050 1,499,310 786,240

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 4TIF: Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on...

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Communication Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and sales for the year are as follows: Purchases: Sales: The president of the company, Connie Kilmer, has asked for your advice on which inventory cost flow method should be used for the 32,000-unit physical inventory that was taken on December 31. The company plans to expand its product line in the future and uses the periodic inventory system. Write a brief memo to Ms. Kilmer comparing and contrasting the LIFO and FIFO inventory cost flow methods and their potential impacts on the companys financial statements.
Financial statement data for years ending December 31 for Holland Company follow: a. Determine the inventory turnover for 20Y4 and 20Y3. b. Determine the days sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place. c. Does the change in inventory turnover and the days sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?
Inventory movements for product X during the last quarter were as follows: Opening inventory at 1 January was 6 items valued at $15 each. January Purchases 10 items at $19.80 each February Sales 10 items at $30 each March Purchases 20 items at $24.50 Sales 5 items at $30 each Gross profit for the quarter, using the continuous weighted average cost method, would be: $ %24
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Required information [The following information applies to the questions displayed below.] A company began January with 7,000 units of its principal product. The cost of each unit is $6. Inventory transactions for the month of January are as follows: Date of Purchase January 10 January 18 Totals Total * Includes purchase price and cost of freight. Date of Sale January 5 January 12 January 20 Total Sales LIFO Beginning Inventory Purchases: Units 6,000 7,000 13,000 January 10 January 18 Units 10,000 units were on hand at the end of the month. 3,000 3,000 4,000 10,000 2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system. Cost of Goods Available for Sale Cost of Goods Available for Sale Number Cost per of units unit Purchases Unit Cost* $7 8 7,000 $ 6.00 6,000 $ 7.00 7,000 $ 8.00 20,000 $ $ 42,000 Total Cost $ 42,000 56,000 $ 98,000 42,000 56,000 140,000 Cost of Goods Sold - Periodic LIFO Cost of Goods Sold Number of units sold Cost per…
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Required information [The following information applies to the questions displayed below.] A company began January with 6,000 units of its principal product. The cost of each unit is $7. Inventory transactions for the month of January are as follows: * Total Date of Purchase January 10 January 18 Totals *Includes purchase price and cost of freight. Date of Sale January 5 January 12 January 20 Total Sales Average Cost Beginning Inventory Purchases: Units January 10 January 18 5,000 6,000 11,000 8,000 units were on hand at the end of the month. Units 3,000 2,000 4,000 9,000 1. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system. Purchases Unit Cost* $ 8 9 Cost of Goods Available for Sale Cost of Goods Available for Sale 6,000 $ 7.00 $ 42,000 Number Unit of units Cost 5,000 $8.00 6,000 $9.00 17,000 Total Cost $ 40,000 54,000 $ 94,000 40,000 54,000 $ 136,000 Cost of Goods Sold - Average Cost Average Cost per Unit Number of units…
Wade Company estimates the cost of its physical inventory on March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available: Inventory, March 1 $4,000,000 Purchases during March 2,000,000 Purchase returns 104,000 Sales during March 3,400,000 The estimate of the cost of inventory on March 31 would be $2,496,000. $2,720,000. $3,176,000. $3,346,000.
The data summarize the inventory-related activities of Novak Inc. for the month of March. Note that the company experienced increasing unit costs for its purchases throughout the month. Date Mar. 1 Mar. 2 Mar. 15 Mar. 19 Mar. 30 Purchases (beginning inventory) 500 @ $3.70 1,600 @ $4.10 6,200 @ $4.40 1,700 @ $4.80 10,000 Novak Inc. 500 units @ $3.70 1,600 units @ $4.10 6,200 units @ $4.40 1,700 units @ $4.80 10,000 units = = = Sold or Issued The cost of goods available for sale is calculated and shown below. $1,850 6,560 27,280 8,160 4,000 $43,850 4,000 Balance 500 units 2,100 units 8,300 units 4,300 units 6,000 units Assume that Novak Inc. uses a periodic inventory system, where the inventory cost is calculated only at the end of the month. How are ending inventory and cost of goods sold calculated using the FIFO cost formula?
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The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 7-1B. Date Transaction Number of units Per unit ($) Total ($) April 3 Inventory 25 1.200 30.000 8 Purchase 75 1.240 93.000 11 Sale 40 2.000 80.000 30 Sale 30 2.000 60.000 May 8 Purchase 60 1.260 76.500 10 Sale 50 2.000 100.000 19 Sale 20 2.000 40.000 28 Purchase 80 1.260 100.800 June 5 Sale 40 2.250 90.000 16 Sale 25 2.250 56.250 21 Purchase 35 1.264 44.240 28 Sale 44 2.250 99.000 Instructions1. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period, using the first-in, first-out method and the periodic inventory system.2. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period, using the last-in, first-out method and the periodic inventory system.3. Determine the inventory on June 30, 2014, and the cost of goods sold for the threemonth period,…