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:

  $GrossProfit=\frac{GrossProfit}{Sales}$

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

  $Costofgoodssold =NetSales–Grossprofit$

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:

  $GrossProfit=\frac{GrossProfit}{Sales}$

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

  $Costofgoodssold =NetSales–Grossprofit$

Requirement-b:

To Calculate:

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