US Kieso, Intermediate Accounting, 16e CALCULATOR PRINTE Question 1 w tztchSandh

Question

US Kieso, Intermediate Accounting, 16e CALCULATOR PRINTE Question 1 w tztchSandhill Company uses the gröss profit method to estimate inve entory for monthly reporting purposes. Presented below is information for the month of May Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts $ 171,100 636,700 28,700 1,067,400 63,300 11,300 Compute the estimated inventory at May 31, assuming that the gross profit is 30% of net sales. The estimated inventory at May 31 s Attempts: 0 of 6 used sSAVE FO

Explanation / Answer

Inventory, May 1 (at cost) $171,100 Purchases (gross) (at cost) 686,700 Purchase discounts (11,300) Freight-in 28,700 Goods available (at cost) $875,200 Sales (at selling price) $1,067,400 Sales returns (at selling price) (63,300) Net sales (at selling price) 1,004,100 Less gross profit (30% of $1,004,100) (301,230) Sales (at cost) $702,870 Estimated inventory, May 31 (at cost) $172,330

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