Bill Money, owner of Money Company, is reviewing the quarterly financial statements and thinks the cost of
Question:
Bill Money, owner of Money Company, is reviewing the quarterly financial statements and thinks the cost of goods sold is out of line with past years. The following historical data is available for 2013 and 2014:
At the end of the first quarter of 2014, Money Company’s ledger had the following account balances:
Sales .................$280,000
Purchases ............... 210,000
Beginning inventory, January 1, 2013 .... 70,000
Required
Using the information provided, estimate the following for the first quarter of 2015:
a. Cost of goods sold. (Use average cost of goods sold percentage.)
b. Ending inventory at March 31 based on the historical cost of goods sold percentage.
c. Inventory shortage if the inventory balance as of March 31 is$125,000.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward