Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly fina
ncial statements required by its bank. Inventory on hand at the end of October was $58400. The following information for the month of November was available from company records:
Purchases of $114000
Freight-in of $3900
Sales of $188000
Sales Returns of $5200
Purchase Returns of $4300
In addition, the controller is aware of $8600 of inventory that was stolen during November from one of the company's warehouses.
Required:
1. Using the template below, calculate the estimated inventory at the end of November, assuming a gross profit ratio of 37%.
Beginning Inventory 58400
Plus: Net purchases ??
Freight-in 3900
Cost of Goods Available for Sale ??
Less: Cost of Goods Sold
Net Sales ??
Less Estimated Gross Profit ??
Estimated Cost of Goods Sold ??
Estimated Inventory before Theft ??
Less: Stolen Inventory 8600
Estimated Ending Inventory ??
2. Using the template below, calculate the estimated inventory at the end of November, assuming a markup on cost of 100%.
Beginning Inventory 58400
Plus: Net purchases ??
Freight-in 3900
Cost of Goods Available for Sale ??
Less: Cost of Goods Sold
Net Sales ??
Less Estimated Gross Profit ??
Estimated Cost of Goods Sold ??
Estimated Inventory before Theft ??
Less: Stolen Inventory 8600
Estimated Ending Inventory ??
1. Net Purchases
1. Cost of Goods Available for Sale
1. Net Sales
1. Estimated Gross Profit
1. Estimated Cost of Goods Sold
1. Estimated Inventory before Theft
1. Estimated Ending Inventory
2. Net Purchases
2. Cost of Goods Available for Sale
2. Net Sales
2. Estimated Gross Profit
2. Estimated Cost of Goods Sold
2. Estimated Inventory before Theft
2. Estimated Ending Inventory
Purchases of $114000
Freight-in of $3900
Sales of $188000
Sales Returns of $5200
Purchase Returns of $4300
In addition, the controller is aware of $8600 of inventory that was stolen during November from one of the company's warehouses.
Required:
1. Using the template below, calculate the estimated inventory at the end of November, assuming a gross profit ratio of 37%.
Beginning Inventory 58400
Plus: Net purchases ??
Freight-in 3900
Cost of Goods Available for Sale ??
Less: Cost of Goods Sold
Net Sales ??
Less Estimated Gross Profit ??
Estimated Cost of Goods Sold ??
Estimated Inventory before Theft ??
Less: Stolen Inventory 8600
Estimated Ending Inventory ??
2. Using the template below, calculate the estimated inventory at the end of November, assuming a markup on cost of 100%.
Beginning Inventory 58400
Plus: Net purchases ??
Freight-in 3900
Cost of Goods Available for Sale ??
Less: Cost of Goods Sold
Net Sales ??
Less Estimated Gross Profit ??
Estimated Cost of Goods Sold ??
Estimated Inventory before Theft ??
Less: Stolen Inventory 8600
Estimated Ending Inventory ??
1. Net Purchases
1. Cost of Goods Available for Sale
1. Net Sales
1. Estimated Gross Profit
1. Estimated Cost of Goods Sold
1. Estimated Inventory before Theft
1. Estimated Ending Inventory
2. Net Purchases
2. Cost of Goods Available for Sale
2. Net Sales
2. Estimated Gross Profit
2. Estimated Cost of Goods Sold
2. Estimated Inventory before Theft
2. Estimated Ending Inventory
1 answer:
1)The estimated ending inventory is $48,236
2)The estimated ending inventory is $72,000
Explanation:
1)For the given values the beginning inventory,net purchases, freight-in, cost of goods available for sale , cost of goods sold, net sales, less estimated gross profit, estimated inventory before theft, stolen inventory and estimated ending inventory are calculated in the given system.
The estimated ending inventory is $48,236
2)
For the given values the beginning inventory,net purchases, freight-in, cost of goods available for sale , cost of goods sold, net sales, less estimated gross profit, estimated inventory before theft, stolen inventory and estimated ending inventory are calculated in the given system.
The estimated ending inventory is $72,000
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