gross profit methods. An inventory taken the morning after a large thef disclose

Question

gross profit methods. An inventory taken the morning after a large thef discloses $60,000 of goods on hands as of March 12. The following additional data is available from the books:   

Inventory on hands, March 1- $84,000. Purchase received, March 1-11 - $63,000. Sales( goods delivered to castomers)-$105,000. Past records indicate that sales are made at 40% above cost. Instructions: estimate the inventory of goods on hands at the close of business on March 11 by the gross profit method and determine the amount of the theft loss. Show appropriate titles for all amount in your presentation.

Explanation / Answer

estimate the inventory of goods on hands at the close of business on March 11 by the gross profit method and determine the amount of the theft loss

Beginning inventory 84000 Purchaseee 63000 Total goods available for sale 147000 Sales 105000 Less: Gross profit (105000*40/140) (30000) Cost of goods sold (75000) Ending inventory on march 11 72000 Disclose inventory on march 12 -60000 Amount of theft loss 12000

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