Inventory Estimation - Gross Profit Rate Method The following information appears in Jasper Company's records for the year ended December 31: Inventory, January 1 P 650,000 Purchases 2,300,000 Purchase returns 80,000 Freight-in Sales 60,000 3,400,000 Sales discounts 20,000 Sales returns 30,000 On December 31, a physical count revealed that the ending inventory was only P420,000. Jasper's gross profit on net sales has remained constant at 30 percent in recent years. Jasper suspects that some inventory may have been pilfered by one of the company's employees. On December 31, what is the estimated cost of missing inventory?

Inventory Estimation - Gross Profit Rate Method The following information appears in Jasper Company's records for the year ended December 31: Inventory, January 1 P 650,000 Purchases 2,300,000 Purchase returns 80,000 Freight-in Sales 60,000 3,400,000 Sales discounts 20,000 Sales returns 30,000 On December 31, a physical count revealed that the ending inventory was only P420,000. Jasper's gross profit on net sales has remained constant at 30 percent in recent years. Jasper suspects that some inventory may have been pilfered by one of the company's employees. On December 31, what is the estimated cost of missing inventory?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 38BE: Inventory Analysis Callahan Company reported the following information for the current year....

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Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows: There are 1,200 units of inventory on hand on December 31, 20-2. REQUIRED 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Hursts inventory on December 31 was 18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of 100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.
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