Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 5, Problem 41E
Cost of goods sold and related items
The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 20Y8:
| Estimated returns of current year sales | $ 11,600 |
| Inventory, May 1, 20Y7 | 380,000 |
| Inventory, April 30, 20Y8 | 415,000 |
| Purchases | 3,800,000 |
| Purchases returns and allowances | 150,000 |
| Purchases discounts | 80,000 |
| Sales | 5,850,000 |
| Freight in | 16,600 |
a. Prepare the “Cost of goods sold” section of the income statement for the year ended April 30, 20Y8, using the periodic inventory system.
b. Determine the gross profit to be reported on the income statement for the year ended April 30, 20Y8.
c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?
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Chapter 5 Solutions
Financial And Managerial Accounting
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