Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 10, Problem 10.12P
a.
To determine
The estimated cost of goods sold, gross profit and ending inventory for recent three years.
Given information:
Inventory at the beginning amounted to $598.
Purchases made were $2400.
Goods returned worth $24.
Goods sold prior to storm occurred are worth $3,945.
Company is using gross profit method for determining inventory.
b.
To determine
The estimated cost of goods sold, gross profit and ending inventory for recent two years.
c.
To determine
The difference based on 2-year and 3-year historical gross profit percentage.
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A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following:
Merchandise inventory, January 1, 2021 $1,900,000Purchases to date 5,800,000Freight-in 400,000Sales to date 8,200,000
The gross profit ratio has averaged 20% of sales for the past four years.Required:Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
Young Company, a camera store, lost some inventory in a fire on December 15. To file an insurance claim, the company must estimate its December 15 inventory using the gross profit method. For the past two years, Young Company's gross profit has averaged 45% of net sales. Its inventory records reveal the following data:
(Click the icon to view the data.)
Read the requirements.
Requirement 1. Estimate the cost of the lost inventory using the gross profit method.
Add:
Less:
Net purchases
Estimated cost of goods sold:
Less:
Estimated cost of goods sold
Estimated cost of ending inventory lost
Data table
Inventory, December 1
Transactions December 1-15:
Purchases
Purchases discounts
Purchase returns
Sales
Print
Done
$ 57,500
490,000
19,000
70,600
663,000
X
Requirements
1. Estimate the cost of the lost inventory using the gross profit method.
2. Prepare the income statement for December 1 to December 15 for this product
through gross profit. Show the detailed computations of cost of goods…
Adams Corporation estimates that it lost $75,000 in inventory from a recent flood. The following information is available from the records of the company’s periodic inventory system: beginning inventory, $150,000; purchases and net sales from the beginning of the year through the date of the flood, $450,000 and $700,000, respectively. What is the company’s gross profit ratio?
Gross profit ratio
Choose Numerator:
Choose Denominator:
Gross profit ratio
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=
Gross profit ratio
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Chapter 10 Solutions
Intermediate Accounting (2nd Edition)
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