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 Requirement-a: To Calculate: The Gross Profit Ratios of Campbell Soup Company for past three years.

Question

After describing a threat/risk in either the revenue cycle (i.e., in sales and cash collection activities) or the expenditure cycle (i.e., in purchases or cash disbursement activities). What are specific internal controls that might be applied to mitigate each of the threats we've identified?

Answer 1

Question

Chapter 9, Problem 9.9E

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:

Gross Profit = Gross ProfitSales

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

Cost of goods sold = Net Sales – Gross profit

Requirement-a:

To Calculate:

The Gross Profit Ratios of Campbell Soup Company for past three years.

To determine

Concept Introduction:

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:

Gross Profit = Gross ProfitSales

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

Cost of goods sold = Net Sales – Gross profit

Requirement-b:

To Calculate:

The Estimated Gross Profit and Cost of Goods Sold for the first four months of the year 2015

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