PROBLEM:To test your knowledge of the relationships of these items, insert the missing figures inthe following income statement. Note that gross profit is 40% of net sales and profit is10% of net sales.Net SalesGross SalesLess: Sales Returns & AllowancesP45,00015,000Sales DiscountsNet SalesPCost of Goods SoldP220,000Inventory, Jan. 1, 2018PurchasesP985,000Less: Purchases Returns &Allowances P31,00020,000Purchases DiscountsNet PurchasesTransportation-In36,000Net Cost of PurchasesCost of Goods Available for SaleLess: Inventory, Dec. 31, 2018Cost of Goods Sold ·260,000Gross Margin from SalesOperating ExpensesP620,000ProfitPREQUIRED: Complete the missing elementsby showing your supporting computations.(No need to prepare the income statement.)What should be the amount of the following?a) Gross Salesb) Total of contra-sales accounts

Income statement is one of the financial statement of the business, which shows all incomes and all…

PROBLEM: To test your knowledge of the relationships of these items, insert the missing figures in the following income statement. Note that gross profit is 40% of net sales and profit is 10% of net sales. Net Sales Gross Sales Less: Sales Returns & Allowances P45,000 Sales Discounts 15,000 Net Sales Cost of Goods Sold P220,000 Inventory, Jan. 1, 2018 Purchases P985,000 Less: Purchases Returns &Allowances P31,000 20,000 Purchases Discounts P Net Purchases Transportation-In 36,000 Net Cost of Purchases P Cost of Goods Available for Sale 260,000 Less: Inventory, Dec. 31, 2018 Cost of Goods Sold · P620,000 Gross Margin from Sales Operating Expenses P Profit REQUIRED: Complete the missing elements by showing your supporting computations. (No need to prepare the income statement.) What should be the amount of the following? a) Gross Sales b) Total of contra-sales accounts

PROBLEM: To test your knowledge of the relationships of these items, insert the missing figures in the following income statement. Note that gross profit is 40% of net sales and profit is 10% of net sales. Net Sales Gross Sales Less: Sales Returns & Allowances P45,000 Sales Discounts 15,000 Net Sales Cost of Goods Sold P220,000 Inventory, Jan. 1, 2018 Purchases P985,000 Less: Purchases Returns &Allowances P31,000 20,000 Purchases Discounts P Net Purchases Transportation-In 36,000 Net Cost of Purchases P Cost of Goods Available for Sale 260,000 Less: Inventory, Dec. 31, 2018 Cost of Goods Sold · P620,000 Gross Margin from Sales Operating Expenses P Profit REQUIRED: Complete the missing elements by showing your supporting computations. (No need to prepare the income statement.) What should be the amount of the following? a) Gross Sales b) Total of contra-sales accounts

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 58E: Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following...

See similar textbooks

Similar questions

Kulsrud Company would like to estimate the current inventory level. Using the gross profit method and the following information, estimate the current inventory level for Kulsrud Company. Goods available for sale 100,000 Net sales 150,000 Normal gross profit as a percent of sales 40%
The following is select account information for Sunrise Motors. Sales: $256,400; Sales Returns and Allowances: $34,890; COGS: $120,470; Sales Discounts: $44,760. Given this information, what is the Gross Profit Margin Ratio for Sunrise Motors? (Round to the nearest whole percentage.)
The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
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?
Use the following hypothetical data for Walgreens in Years 11 and 12 to project revenues, cost of goods sold, and inventory for Year +1. Assume that Walgreenss Year +1 revenue growth rate, gross profit margin, and inventory turnover will be identical to Year 12. Project the average inventory balance in Year +1 and use it to compute the implied ending inventory balance.
Inventory analysis Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected financial information for both companies from a recent year's financial statements (in millions): a. Determine for bom companies (1) the inventory turnover and (2) the days' sales in inventory. Round to one decimal place. b. Compare and interpret the inventory metrics computed in (a).
Use the first-in, first-out (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.
Use the weighted-average (AVG) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.
Use the last-in, first-out (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.
The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Analyzing the Accounts Casey Company uses a perpetual inventory system and engaged in the following transactions: a. Made credit sales of $825,000. The cost of the merchandise sold was $560,000. b. Collected accounts receivable in the amount of $752,600. c. Purchased goods on credit in the amount of $574,300. d. Paid accounts payable in the amount of $536,200. Required: Prepare the journal entries necessary to record the transactions. Indicate whether each transaction increased cash, decreased cash, or had no effect on cash.
Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following data: Required: 1. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the FIFO inventory costing method. Be sure to explain what each ratio means. 2. Calculate McLellands gross profit ratio (rounded to two decimal places), inventory turnover ratio (rounded to three decimal places), and the average days to sell inventory (assume a 365-day year and round to two decimal places) using the LIFO inventory costing method. Be sure to explain what each ratio means. 3. CONCEPTUAL CONNECTION Which ratios-the ones computed using FIFO or LIFO inventory values-provide the better indicator of how successful McLelland was at managing and controlling its inventory?