Question

Amtran Enterprises lost its entire inventory in a hurricane that occurred on October 31, 2012. Over the past five years, gross profit has averaged 30% of net sales. The company’s records reveal the following data for the month of October:

Beginning Inventory........................................................................................ $ 36,500
Net Purchases..................................................................................................... 370,200
Sales................................................................................................................... 555,500
Sales Returns and Allowances............................................................................ 60,700
Sales Discounts .................................................................................................. 2,600

Requirements
1. Estimate the October 31 inventory, using the gross profit method.
2. Prepare the October income statement through gross profit for Amtran Enterprises.



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  • CreatedApril 29, 2014
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