National Distributing Company uses a periodic inventory system to track its merchandise inventory and the gross profit method to estimate ending inventory and cost of goods sold for interim periods. Net purchases for the month of August were $31,000. The July 31 and August 31, 2016, financial statements contained the following information: Income Statements For the Months Ending August 31, 2016 July 31, 2016 Net sales $50,000 $40,000 Balance Sheets At July 31, 2016 August 31, 2016 Assets: Merchandise inventory $28,000 $27,000 Required: Determine the company's cost percentage.

National Distributing Company uses a periodic inventory system to track its merchandise inventory and the gross profit method to estimate ending inventory and cost of goods sold for interim periods. Net purchases for the month of August were $31,000. The July 31 and August 31, 2016, financial statements contained the following information: Income Statements For the Months Ending August 31, 2016 July 31, 2016 Net sales $50,000 $40,000 Balance Sheets At July 31, 2016 August 31, 2016 Assets: Merchandise inventory $28,000 $27,000 Required: Determine the company's cost percentage.

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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