Question 5 Thefollowing information was taken from Jackson Company\'s accounting

Question

Question 5

Thefollowing information was taken from Jackson Company's accountingrecords for 2007:

salesrevenue ............................. $325,000

freight-in................................     ?

purchasereturns ..........................    7,000

rentexpense ..............................    44,000

beginninginventory .......................    19,000

net income................................   104,000

bad debtexpense ..........................    25,000

purchases.................................    86,000

freight-out...............................      ?

gain onsale of investments ...............    5,000

salesdiscounts ...........................    14,000

allowancefor doubtful accounts ...........    17,000

purchasediscounts ........................    4,000

income taxexpense ........................    45,000

endinginventory ..........................     ?

grossprofit ..............................   230,000

Jackson Company reported an inventory turnover ratio of3.6 during 2007.

Calculatethe amount of freight-in reported byJackson Company during 2007. Do not use decimals
in your answer.

Question 5

Explanation / Answer

Sales Revenue 325000 Gross Profit 230000 Cost of Goods Sold 95000 Inventory Turnover Ratio Cost of Goods Sold / Average Inventory 3.6 95,000 / Average Inventory Average Inventory 95,000 / 3.6 26,388.89 Average Inventory ( Opening Inventory + Closing Inventory ) / 2 26,388.89 ( 19,000 + Closing Inventory ) / 2 19,000 + Closing Inventory ( 26,388.89 *2 ) - 19,000 Closing Inventory Closing Inventory 33,777.78 Cost of Goods Sold Opening Inventory + Net Purchases + Freight In - Cosing Inventory 9500 19000 + ( 86,000 - 4000 ) + Freight In - 33,777.78 Solving the Equation, We get , Freight In 57,7222.22

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.