Question

Kids Costumes estimates its ending merchandise inventory by the gross profit method. The gross profit has averaged 39% of net sales. The company’s ­merchandise inventory records reveal the following data:
Merchandise Inventory, July 1 ........ $ 268,000
Transactions during July: Purchases ...... 7,661,000
Purchase Discounts ............. 171,000
Purchase Returns and Allowances ........ 32,000
Sales .................. 8,788,000
Sales Returns and Allowances ........ 35,000

Requirements
1. Estimate the cost of the July 31 merchandise inventory, using the gross profit method.
2. Prepare the July 2015 partial income statement through gross profit for Kids Costumes.



$1.99
Sales1
Views87
Comments0
  • CreatedJanuary 16, 2015
  • Files Included
Post your question
5000