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mezya [45]
3 years ago
5

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 $ 2,000,000 Purchases to date 5,900,000 Freight-in 500,000 Sales to date 9,200,000 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.
Business
1 answer:
wel3 years ago
3 0

Answer:

$1,040,000

Explanation:

The calculation of cost of the inventory is shown below:-

Cost of Goods available for sale = Inventory balance + Purchase to date + Freight In

= $2,000,000 + $5,900,000 + $500,000

= $8,400,000

Cost of Goods Sold = Sales to date - (Sales to date × Gross profits)

= $9,200,000  - ($9,200,000 × 20%)

= $9,200,000 - $1,840,000

= $7,360,000

Estimated loss from fire = Cost of Goods available for sale - Cost of Goods Sold

= $8,400,000 - $7,360,000

= $1,040,000

For computing the estimated loss from fire we simply applied the above formula.

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Answer:

Net profit is more important to consider because it accounts for all the costs associated with making and selling the product and it includes the operating expenses that are excluded from gross profit. Gross profit is the profit made after deducting costs associated with making and selling its products, or the costs associated with providing its services.

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zhannawk [14.2K]

Answer:

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Explanation

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4 0
2 years ago
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Norton Manufacturing expects to produce 2,900 units in January and 3,600 units in February. Norton budgets $20 per unit for dire
storchak [24]

Answer:

Purchases= $26,550

Explanation:

Giving the following information:

Production:

January= 2,900 units

February= 3,600 units

Norton budgets $20 per unit for direct materials.

Beginning inventory raw materials= $38,650.

Desired ending inventory direct materials= 10% of the next month's direct materials needed for production.

To calculate the purchases of direct material, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

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An important regulatory document for conducting clinical trials, the Investigator's Brochure (IB) summarizes an investigational medicinal product's (IMP) physical, chemical, pharmaceutical, pharmacological, and toxicological characteristics as well as any clinical experience.

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Trava [24]

Answer:

The plot of the yields is attached.

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