Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows: Cost Retail Jaffe Co. $ 615,000 $ 400,000 Merchandise inventory, February 1 Transactions during February: Purchases (net) 4,055,000 5,325,000 Sales 5,100,000 Coronado Co. $ 400,000 Merchandise inventory, May 1 Transactions during May through October: Purchases (net) Sales 3,150,000 4,750,000 Estimated gross profit rate 35% Instructions 1. Determine the estimated cost of the merchandise inventory of Jaffe Co. on February 28 by the retail method, presenting details of the computations. 2. a. Estimate the cost of the merchandise inventory of Coronado Co. on October 31 by the gross profit method, presenting details of the computations. b. Assume that Coronado Co. took a physical inventory on October 31 and discovered that $366,500 of merchandise was on hand. What was the estimated loss of inven- tory due to theft or damage during May through October?

Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows: Cost Retail Jaffe Co. $ 615,000 $ 400,000 Merchandise inventory, February 1 Transactions during February: Purchases (net) 4,055,000 5,325,000 Sales 5,100,000 Coronado Co. $ 400,000 Merchandise inventory, May 1 Transactions during May through October: Purchases (net) Sales 3,150,000 4,750,000 Estimated gross profit rate 35% Instructions 1. Determine the estimated cost of the merchandise inventory of Jaffe Co. on February 28 by the retail method, presenting details of the computations. 2. a. Estimate the cost of the merchandise inventory of Coronado Co. on October 31 by the gross profit method, presenting details of the computations. b. Assume that Coronado Co. took a physical inventory on October 31 and discovered that $366,500 of merchandise was on hand. What was the estimated loss of inven- tory due to theft or damage during May through October?

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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