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XYZ Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing mo following information for the month of August was available from company records: Purchases $219,000 Freight-in 5,200 Sales 350,000 Sales returns 9.100 Purchases returns 4,500 In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company Required: (show computations)

XYZ Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing mo following information for the month of August was available from company records: Purchases $219,000 Freight-in 5,200 Sales 350,000 Sales returns 9.100 Purchases returns 4,500 In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company Required: (show computations)

FINANCIAL ACCOUNTING
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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XYZ Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $122,500. The following information for the month of August was available from company records: Purchases $219,000 Freight-in 5,200 Sales 350,000 Sales returns 9,100 Purchases returns 4,500 In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company's warehouses. Required: (show computations) Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 35%.
Transcribed Image Text:XYZ Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $122,500. The following information for the month of August was available from company records: Purchases $219,000 Freight-in 5,200 Sales 350,000 Sales returns 9,100 Purchases returns 4,500 In addition, the controller is aware of $10,000 of inventory that was stolen during August from one of the company's warehouses. Required: (show computations) Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 35%.
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