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Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the compan included the information shown below: Sales $1,100,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $67,000 Purchases 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold 777,000 Gross profit on sales $323,000 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead they had merely estimated the inventory. Required: Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates. Gross profit on sales Cost of goods sold 2$ Ending inventory

Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the compan included the information shown below: Sales $1,100,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $67,000 Purchases 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold 777,000 Gross profit on sales $323,000 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead they had merely estimated the inventory. Required: Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates. Gross profit on sales Cost of goods sold 2$ Ending inventory

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 15BEA: Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000....
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Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the company included the information shown below: Sales $1,100,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $67,000 Purchases 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold 777,000 Gross profit on sales $323,000 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead, they had merely estimated the inventory. Required: Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates. Gross profit on sales Cost of goods sold Ending inventory Previous Next %24 %24 %24
Transcribed Image Text:Over the past several years, Landmark Supplies has averaged a gross profit of 34%. At the end of 20--, the income statement of the company included the information shown below: Sales $1,100,000 Cost of goods sold: Merchandise inventory, January 1, 20-- $67,000 Purchases 840,000 Goods available for sale $907,000 Less merchandise inventory, December 31, 20-- 130,000 Cost of goods sold 777,000 Gross profit on sales $323,000 Investigation revealed that employees of the company had not taken an actual physical count of the inventory on December 31, 20--. Instead, they had merely estimated the inventory. Required: Under the gross profit method of inventory estimation, determine the following items to check the accuracy of the employees' estimates. Gross profit on sales Cost of goods sold Ending inventory Previous Next %24 %24 %24
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