uly 8. a fire destroyed the entire merch Corpo entire t Sales, January 1 through
ID: 2396378 • Letter: U
Question
uly 8. a fire destroyed the entire merch Corpo entire t Sales, January 1 through July enory anury tough July s Gross profit ratio hro January A) $192,000. B) $490,000. C) $510,000. D) $280,000. the estimated inventory on July 8 immediasely prior to the finc? 130.000 640 000 14) Data related to the inventories of Mountain Ski Equipment and Supplies is prescenilod bel Boots Apparel S 150,000 120,000 Supplies 60,000 48,000 Selling price 180,000 128,000 133,000 Cost Replacement 120,000 130,000 1100 50,000 Sales commission Normal gross profit ratio 10% 10% 10% 10% 20% 20% 15% In applying the lower of cost or market rule, the inventory of supplies would be valued at A) $45,000, B) $54,000. C) $50,000. D) $48,000.Explanation / Answer
Solution 13:
Sale from Jan 1 to Jul 8 = $700,000
Gross profit ratio = 30%
Cost of goods sold from January 1 through July 8 = $700,000 - $700,000*30% = $490,000
Estimated inventory on July 8, immediately prior to fire = Beginning inventory + Purchases - COGS
= $130,000 + $640,000 - $490,000 = $280,000
Hence option D is correct.
Solution 14:
Inventory cost of supplies = $48,000
Net realizable value = $60,000 - 10% of $60,000 = $54,000
As cost is lower than NRV therefore supplies should be valued at $48,000
Hence option D is correct.
Solution 1:
The largest expense in retailers income statement is "Cost of goods sold"
Hence option B is correct.
Solution 2:
Total cost of goods available for sale = (40*$100) + (70*$80) + (170*$60) = $19,800
Total units available for sale = 40 + 70 + 170 = 280 units
Average cost per unit = $19,800 / 280 = $70.71 per unit
Ending inventory using average cost methond = $70.71 * 10= $707 (rounded off)
Hence option C is correct.
Solution 3:
Ending inventory under FIFO will consist of purchase from 170 units, hence
Cost of ending inventory = 10 * $60 = $600
Hence option D is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.