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Natali5045456 [20]
3 years ago
10

California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2018. In preparing its insuran

ce claim on the inventory loss, the company developed the following data: Inventory January 1, 2018, $300,000; sales and purchases from January 1, 2018, to May 1, 2018, $1,300,000 and $875,000, respectively. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2018, is:
A. $302,500.
B. $360,000.
C. $395,000.
D. $455,000
Business
2 answers:
Veronika [31]3 years ago
6 0

Answer:

estimated inventory is $395000

C is correct option

Explanation:

given data

Inventory = $300000

sales = $1300000

purchases = $875000

gross profit = 40%

to find out

estimated inventory

solution

we find estimated inventory by this formula

estimated inventory = Inventory + purchases  - (100% - 40%)sale

put here all value

estimated inventory = 300000 + 875000 - (100% - 40%)1300000

estimated inventory = 300000 + 875000  - 780000

estimated inventory = 395000

so estimated inventory is $395000

C is correct option

andre [41]3 years ago
4 0

Answer:

The correct answer to the following question is option C) $395,000

Explanation:

Given information -

Inventory as of January 1 ,2018 = $300,000

Purchase from January to May = $875,000

Sale from January to May = $1300,000

Gross profit reported by California inc = 40%

Here fro calculating the estimated inventory as of May 1, 2018 -

Inventory as of January 1 ,2018 + Purchase + Gross profit - Sales

= $300,000 + $875,000 + ($1300,000 x 40%) - $1300,000

= $1175,000 + $520,000 - $1300,000

= $1695,000 - $1300,000

= $395,000

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2 years ago
On January 1, Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires a
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Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

1) The amortization schedule is presented on the attachment below:

2).

Journal Entry

1 Jan Cash A/c      Dr. $147,750  

   To Notes payable A/c      $147,750

(Being the cash received is recorded)

31 Dec   Interest expense A/c    Dr. $10,342.50  

   Notes payable A/c      $33,277.50

 To Cash A/c    $43,620

(Being the annual payment of installment including interest is recorded)

31 Dec   Interest expense A/c    Dr. $8,013.08  

   Notes payable A/c      $33,606.93

 To Cash A/c    $43,620

(Being the annual payment of installment including interest is recorded)

31 Dec   Interest expense A/c    Dr. $5,520.59  

   Notes payable A/c      $38,099.41

 To Cash A/c    $43,620

(Being the annual payment of installment including interest is recorded)

31 Dec   Interest expense A/c    Dr. $2,853.83  

   Notes payable A/c      $40,766.17

 To Cash A/c    $43,620

(Being the annual payment of installment including interest and setting off liabilities is recorded)

3).

                                                            Bryson Company

                                                           Income Statement

Particular  Amount ($)

Revenue  -

Expenses  

Less - Interest expense 10,342.50

Less - Other expenses -

Net Income -  

4 0
3 years ago
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