Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company. Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales. To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

Question

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Answer 1

Question

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

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Answer 2

Question

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

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Answer 4

Question

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

Answer 6

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

Answer 7

Chapter 6, Problem 6.5BYP

(a)

To determine

Gross profit method: It is one of the simplest methods for inventory valuation and it also helps in errors detection. In it, value of ending inventory is calculated by the application of gross profit rate on the net sales of the company.

Gross Profit Rate: It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.

To determine: The balances in (1). Sales Revenue and (2) Purchases at April 10.

Answer 8

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

Answer 9

(b)

To determine

The average gross profit rate for the years 2015 and 2016.

Answer 10

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

Answer 11

(c)

To determine

The inventory loss as a result of the fire (gross profit method.)

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - Prob. 10Q

Concept explainers

The average gross profit rate for the years 2015 and 2016.

The inventory loss as a result of the fire (gross profit method.)

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Chapter 6 Solutions