Exercise 9-14 Kingbird Company uses the gross profit method to estimate inventor

Question

Exercise 9-14 Kingbird Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented be w s infor nation for the month of Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts s162,100 691,300 30,800 1,041,700 65,900 12,500 Compute the estimated inventory at May 31, assuming that the gross profit is 30% of net sales. The estimated inventory at May 31 LINK TO TEXT VIDEO: SIMILAR EXERCISE Round percentage of sales to 2 dec mal places, eg, 78.74% and final answer to O Compute the estimated inventory at May 31, assuming that the gross profit s 30% of cost. decimal places, e.g. 6,225.) The estimated inventory at May 31

Explanation / Answer

1 Inventory, May 1 162100 Add: Purchases 691300 Freight in 30800 Less: Purchase discounts 12500 709600 Cost of goods available 871700 Less: Cost of goods sold 683060 =(1041700-65900)*(1-0.3) Estimated inventory at May 31 188640 2 Inventory, May 1 162100 Add: Purchases 691300 Freight in 30800 Less: Purchase discounts 12500 709600 Cost of goods available 871700 Less: Cost of goods sold 750585 =(1041700-65900)*(1-0.2308) Estimated inventory at May 31 121115

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