Over the last two years, McBride Company has averaged 35 percent gross profit. At the end of

Question:

Over the last two years, McBride Company has averaged 35 percent gross profit. At the end of 2016, the auditor found the following data in the records of the company:

Over the last two years, McBride Company has averaged 35

Inquiry by the auditor revealed that employees of McBride Company had estimated the inventory on December 31, 2016, instead of taking a complete physical count.

INSTRUCTIONS
Using the gross profit method of inventory estimation, verify the reasonableness (or lack of reasonableness) of the inventory estimate made by the company's employees.
Analyze:
If a physical inventory count on December 31, 2016, revealed an ending inventory of $520,000, calculate the gross profit percentage.

Ending Inventory
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 =...
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Related Book For  book-img-for-question

College Accounting Chapters 1-30

ISBN: 978-0077862398

14th edition

Authors: John Price, M. David Haddock, Michael Farina

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