Cavaliers Ltd. prepares monthly financial statements. Inventory is counted only at year-end; thus, month-end inventories must be estimated. All sales are made on credit. The rate of markup on cost is 25%. The following information relates to May:

Accounts receivable, May 1................................................. $31,000

Accounts receivable, May 31............................................... 37,000

Collections of accounts during May.................................... 94,000

Inventory, May 1.................................................................. 47,000

Net purchases during May................................................... 75,000

Instructions

Show all calculations and round all figures to the wholedollars:

1. Calculate Cavaliers’ credit sales for the year.
2. Given the rate of markup on cost is 25%, calculate the rate ofgross margin on sales. 
3. Estimated the closing inventory on May 31. 

Answer rating: 100% (QA)

1 Credit sales during May Collections of accounts during May AR May 3... View the full answer