Accounting: What the Numbers Mean
Accounting: What the Numbers Mean
12th Edition
ISBN: 9781308841380
Author: David H. Marshall, Wayne W. McManus, Daniel F. Viele
Publisher: McGraw Hill
Question
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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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Beta Supermarket has three departments: A, B, and C, and conducts general advertising that benefits all departments. The total advertising expense for the year was $55,000, and the departmental sales were as follows: . Department A: $132,500 Department B: $187,250 . Department C: $155,000 Total Sales: $474,750 Allocate the advertising expense to Department B based on departmental sales.
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