ade net purchases of $635,000 and had net sales of $910,000 before a fire destroyed the company's inventory. Forercent.d to estimate inventory on a regular basis.s margin method to estimate inventory on a regular basis.mate inventory cost on a regular basis is to determinethe cost of ending inventory for interim financial statements.net purchases.gross sales revenue.t Butterfly Company began October with inventory of $192,000. The business made net purchases of $635,000 and had net sales of $910,000 before a fire destroyed the company's inventory. For thepast several years, Butterfly Company's gross margin on sales has been 38 percent.Required1. Estimate the cost of the inventory destroyed by the fire2. Identify another reason owners and managers use the gross margin method to estimate inventory on a regular basisRequirement 1. Estimate the cost of the inventory destroyed by the fireCost of goods available for saleEstimated cost of goods soldLessEstimated cost of inventory destroyedRequirement 2. Identify another reason owners and managers use the gross margin method to estimato inventory on a regular basis.Another reason owners and managers use the gross margin method to estimate inventory cost on a regular basis is to determine

Gross profit is the difference between sales revenue and cost of goods sold. The cost of goods sold…

Answered: Butterfly Company began October with…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 1CP

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Similar questions

Shetland Company reported net income on the year-end financial statements of $125,000. However, errors in inventory were discovered after the reports were issued. If inventory was understated by $15,000, how much net income did the company actually earn?
Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
Shaquille Corporation began the current year with inventory of 50,000. During the year, its purchases totaled 110,000. Shaquille paid freight charges of 8,500 for those purchases. At the end of the year, Shaquille had inventory of 47,800. Prepare a schedule to determine Shaquille's cost of goods sold for the current year.
On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the year. On its year-end income statement, Pope reported cost of goods sold of 1,025,000. Calculate Popes December 31 ending inventory.
If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?
Assume your company uses the periodic inventory costing method, and the inventory count left out an entire warehouse of goods that were in stock at the end of the year, with a cost value of $222,000. How will this affect your net income in the current year? How will it affect next years net income?
Denali Company manufactures household products such as windows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inventory purposes on December 31 included the following data on the unsold units: Denali can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window. Required: Identify the relevant costs and revenues for the liquidation sale alternative. Is Denali better off accepting the liquidation price rather than doing nothing? Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action—liquidate or reprocess.
Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?
For each of the following independent situations, calculate the missing values: 1. The Belen plant purchased 78,300 of direct materials during June. Beginning direct materials inventory was 2,500, and direct materials used in production were 73,500. What is ending direct materials inventory? 2. Forster Company produced 14,000 units at an average cost of 5.90 each. The beginning inventory of finished goods was 3,422. (The average unit cost was 5.90.) Forster sold 14,120 units. How many units remain in ending finished goods inventory? 3. Beginning work in process (WIP) was 116,000, and ending WIP was 117,300. If total manufacturing costs were 349,000, what was the cost of goods manufactured? 4. If the conversion cost is 84 per unit, the prime cost is 55, and the manufacturing cost per unit is 105, what is the direct materials cost per unit? 5. Total manufacturing costs for August were 412,000. Prime cost was 64,000, and beginning WIP was 76,000. The cost of goods manufactured was 434,000. Calculate the cost of overhead for August and the cost of ending WIP.
Bryce Company manufactures pet supplies. However, Bryces electronic accounting system recently crashed and, unfortunately, only a partial recovery of the companys year-end accounting records (which included several profitability ratios) was possible. As a result, Bryces controller, a bright young CMA named Jeanette, must compute various lost financial account balances using the recovered information listed below. Long-term liabilities: 1,500,000 Ending inventory is the same as beginning inventory. Gross margin: 3,000,000 Net sales: 8,000,000 Accounts receivable turnover: 50 Ending accounts receivable is the same as beginning accounts receivable. Total liabilities: 2,000,000 Current ratio: 2.5 Cash: 600,000 Quick ratio: 2.0 Inventory turnover in days: 3.65 Required: 1. Calculate current liabilities. 2. Calculate current assets. 3. Calculate average accounts receivable 4. Calculate marketable securities. 5. Calculate average inventory.
Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000?
If Barcelona Companys ending inventory was actually $122,000, but the cost of consigned goods, with a cost value of $20,000 were accidentally included with the company assets, when making the year-end inventory adjustment, what would be the impact on the presentation of the balance sheet and income statement for the year that the error occurred, if any?

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