1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations. 2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. 2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations. 2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. 2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as follows:
| Cost | Retail | ||
| Celebrity Tan | |||
| Merchandise inventory, August 1 | $426,000 | $576,000 | |
| Transactions during August: | |||
| Purchases (net) | 4,902,000 | 6,624,000 | |
| Sales | 6,814,000 | ||
| Ranchworks Co. | |||
| Merchandise inventory, March 1 | $258,000 | ||
| Transactions during March through November: | |||
| Purchases (net) | 3,425,000 | ||
| Sales | 5,998,000 | ||
| Estimated gross profit rate | 42% |
1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations.
2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations.
2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education