Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the company included the information shown below:

Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead, they had merely estimated the inventory.

Required:

Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates.

 

Gross profit on sales		?
Cost of goods sold		?
Ending inventory		?

  

Transcribed Image Text:

Sales Cost of goods sold: Merchandise inventory, January 1, 20-- Purchases $67,000 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold Gross profit on sales $1,100,000 777,000 $323,000 Sales Cost of goods sold: Merchandise inventory, January 1, 20-- Purchases $67,000 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold Gross profit on sales $1,100,000 777,000 $323,000

Answer rating: 100% (QA)

Gross Profit on Sales 110000034 37400000 Cost of Goods Sold Sales Gro... View the full answer