On January 1, The Parts Store had a $550,000 inventory at cost. During the first quarter...

 

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On January 1, The Parts Store had a $550,000 inventory at cost. During the first quarter of the year, it purchased $1,690,000 of merchandise, returned $28,100, and paid freight charges on purchased merchandise totalling $42,600. During the past several years, the store's gross profit on sales has averaged 25%. Under the assumption the store had $2,100,000 of sales during the first quarter of the year, use the gross profit method to estimate its inventory at the end of the first quarter. Ending inventory On January 1, The Parts Store had a $550,000 inventory at cost. During the first quarter of the year, it purchased $1,690,000 of merchandise, returned $28,100, and paid freight charges on purchased merchandise totalling $42,600. During the past several years, the store's gross profit on sales has averaged 25%. Under the assumption the store had $2,100,000 of sales during the first quarter of the year, use the gross profit method to estimate its inventory at the end of the first quarter. Ending inventory

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To estimate the ending inventory at the end of the first quarter using the gross profit method we ne... View the full answer