Sam Todd, owner of Todd 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 are available for 2016 and 2017:

At the end of the first quarter of 2018, Todd Company€™s ledger had the following account balances:
Sales .................$280,000
Purchases ................ 210,000
Beginning inventory, January 1, 2018 ... 70,000
Required
Using the information provided, estimate the following for the first quarter of 2018:
a. Cost of goods sold.
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.

Transcribed Image Text:

2016 2017 Net sales Cost of goods sold $220,000 $250,000 99,000 117,200