Sp16-CH6 CT 210 Intro F Accounting (2745 The following information applies to th

Question

Sp16-CH6 CT 210 Intro F Accounting (2745 The following information applies to the questions displayed below] Over a four year period, Jackie Corporation reported the following series of gross profits 2012 2013 2014 2015 $54,000 $60,000 $68,000 $84,000 27800 41,800 23,800 43,800 $26,200 $18,200 $44.200 $40,200 Net sales Cost of goods sold Gross profit In 2015, the company performed a comprehensive review of its Inventory accounting procedures. Based on this review, company records reveal that ending inventory was understated by $1000 in 2013. Inventory In all other years is correct value 10.00 points Required: 1. Calculate the gross profit ratio for each of the four years based on amounts originally reported. 2012 2013 2014

Explanation / Answer

Case 1: 2012 2013 2014 2015 Gross Profit     26,200.00    18,200.00    44,200.00    40,200.00 Sales     54,000.00    60,000.00    68,000.00    84,000.00 Gross profit ratio(Gross Profit/Sales) 48.52% 30.33% 65.00% 47.86% Case 2: 2012 2013 2014 2015 Gross Profit          26,200.00          18,200.00          44,200.00          40,200.00 Add: Understatement of Ending inventory          11,000.00 Less: Overstatement of Beginning inventory          11,000.00 Correct Gross Profits          26,200.00          29,200.00          33,200.00          40,200.00 Sales          54,000.00          60,000.00          68,000.00          84,000.00 Gross profit ratio(Gross Profit/Sales) 48.52% 48.67% 48.82% 47.86%

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