As a result of taking a physical inventory count on December 31, 2016, the Mona Lisa Company
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As a result of taking a physical inventory count on December 31, 2016, the Mona Lisa Company inventory was determined to be $61,500. The auditors for Mona Lisa suspected an inventory shortage and used the gross profit method to estimate the ending inventory. The accounting records for the company contained the following information: Inventory (1/1/16) $ 130,000 Purchases (2016) 760,000 Sales (2016) 1,020,000 Sales returns (2016) 60,000 Gross profit ratio 25% of sales Using the gross profit method, what did the auditors estimate as the amount of the inventory that should have been on hand at December 31, 2016?
Related Book For
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
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