Flenderson company uses the gross profit method to estimate ending inventory and
ID: 2488416 • Letter: F
Question
Flenderson 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 $122,500. The following information for the month of November was available from company records:
In addition, the controller is aware of $10,000 of inventory that was stolen during November from one of the companys warehouses.
Flenderson 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 $122,500. The following information for the month of November was available from company records:
Explanation / Answer
Particulars
Amout
Amout
Particulars
Amout
Amout
Sales
350,000
Opening Inventory
122,500
less: Sales returns
-9,000
341,000
Purchases
219,000
Less:Purchases returns
4300
214,700
Freight-in
5,200
Closing Stock
103,700
Gross Profit =Sales x 30%
102300
Less: Stock Stolen
10,000
93,700
341000 x 30%
102300
444,700
444,700
Closing Stock=$93,700
Particulars
Amout
Amout
Particulars
Amout
Amout
Sales
350,000
Opening Inventory
122,500
less: Sales returns
-9,000
341,000
Purchases
219,000
Less:Purchases returns
4300
214,700
Freight-in
5,200
Closing Stock
103,700
Gross Profit =Sales x 30%
102300
Less: Stock Stolen
10,000
93,700
341000 x 30%
102300
444,700
444,700
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