Cullumber Company uses the gross profit method to estimate inventory 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 $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?
Cullumber Company uses the gross profit method to estimate inventory 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 $167.300 580.800 32,100 979,300 73,300 11.300 Show Transcribed Text A) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales? B) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 3RE: Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of...
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Transcribed Image Text:Cullumber Company uses the gross profit method to estimate inventory 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
$167.300
580.800
32,100
979,300
73,300
11.300
Show Transcribed Text
A) Compute the estimated
inventory at May 31, assuming
that the gross profit is 25% of net
sales?
B) Compute the estimated
inventory at May 31, assuming
that the gross profit is 25% of
cost?
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