Gross Profit Method Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes.
Question:
Gross Profit Method Astaire Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
Inventory, May 1..................$ 160,000
Purchases (gross)...................640,000
Freight-in....................................30,000
Sales......................................1,000,000
Sales returns..............................70,000
Purchase discounts...................12,000
(a) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of sales.
(b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost.
Step by Step Answer:
a Inventory May 1 at cost Purchases at cost Purchase discounts Freightin G...View the full answer
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
