Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory: The formula for gross profit ratio is as follows: G r o s s P r o f i t = G r o s s P r o f i t S a l e s The formula to calculate the Cost of goods sold is as follows: C o s t o f g o o d s s o l d = N e t S a l e s – G r o s s p r o f i t The formula to calculate the ending inventory is as follows: C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d – C o s t o f g o o d s s o l d To determine: The estimated Cost of ending inventory using the Gross profit method

Question

Want to see the full answer?

Answer 1

Question

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Hudini Company's variable overhead is applied on the basis of direct labor hours.

Please explain the solution to this general accounting problem with accurate principles.

Quick answer of this accounting question

Answer 2

Question

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Answer 6

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Answer 7

Chapter 6, Problem 17BE

To determine

Concept Introduction:

Gross Profit method: Gross Profit method is used to estimate the value of ending inventory and cost of goods sold. Under this method a gross profit ratio is used to calculate the estimated cost of the inventory. Following formulas are used to derive the cost of ending inventory:

The formula for gross profit ratio is as follows:

$G r o s s P r o f i t = \frac{G r o s s P r o f i t}{S a l e s}$

The formula to calculate the Cost of goods sold is as follows:

$C o s t o f g o o d s s o l d = N e t S a l e s - G r o s s p r o f i t$

The formula to calculate the ending inventory is as follows:

$C o s t o f E n d i n g i n v e n t o r y = B e g i n n i n g i n v e n t o r y a t c o s t + C o s t o f g o o d s p u r c h a s e d - C o s t o f g o o d s s o l d$

To determine: The estimated Cost of ending inventory using the Gross profit method

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 6 - Prob. 1DQ Ch. 6 - 2. Where is the amount of merchandise inventory...Ch. 6 - Prob. 3DQ Ch. 6 - Prob. 4DQ Ch. 6 - What does the full disclosure principle prescribe...Ch. 6 - Prob. 6DQ Ch. 6 - Prob. 7DQ Ch. 6 - Prob. 8DQ Ch. 6 - Prob. 9DQ Ch. 6 - What is the meaning of market as it is used in...

Concept explainers

Videos

Want to see the full answer?

Chapter 6 Solutions