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ezto. Question 7 (of 17) 7· value 10.00 points Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $59,100. The following information for the month of November was available from company records Freight-in Sales Sales retums $116,000 3,600 210,000 8,000 Purchases retuns 7,000 In addition, the controler is aware of $11,000 of inventory that was stolen during November from one of the company’s warehouses. Required: 1. Cal ulate the osinated memory at the end of November, assuming a goss profit ratio of 35%. Beginning inventory Plus: Net purchases Cost of goods available for sale Less Cost of goods sold Net sales Less: Estimated gross proft Estimated cost of goods sold Estimated cost of inventory before theft Less: Stolen inventory Estimated onding inventory 4
Expert Answer
| 1 | ||
| Beginning inventory | 59100 | |
| Plus: Net purchases | 109000 | |
| Freight-in | 3600 | |
| Cost of goods available for sale | 171700 | |
| Less: Cost of goods sold: | ||
| Net sales | 202000 | |
| Less: Estimated gross profit | 70700 | |
| Estimated cost of goods sold | 131300 | |
| Estimated cost of inventory before theft | 40400 | |
| Less: Stolen inventory | 11000 | |
| Estimated ending inventory | 29400 | |
| 2 | ||
| Beginning inventory | 59100 | |
| Plus: Net purchases | 109000 | |
| Freight-in | 3600 | |
| Cost of goods available for sale | 171700 | |
| Less: Cost of goods sold: | ||
| Net sales | 202000 | |
| Less: Estimated gross profit | 101000 | |
| Estimated cost of goods sold | 101000 | |
| Estimated cost of inventory before theft | 70700 | |
| Less: Stolen inventory | 11000 | |
| Estimated ending inventory | 59700 |
