1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations. 2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. 2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations. 2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations. 2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 7PA: Selected data on merchandise inventory, purchases, and sales for Celebrity Tan Co. and Ranchworks...
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Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as follows:
Cost | Retail | ||
Celebrity Tan | |||
Merchandise inventory, August 1 | $426,000 | $576,000 | |
Transactions during August: | |||
Purchases (net) | 4,902,000 | 6,624,000 | |
Sales | 6,814,000 | ||
Ranchworks Co. | |||
Merchandise inventory, March 1 | $258,000 | ||
Transactions during March through November: | |||
Purchases (net) | 3,425,000 | ||
Sales | 5,998,000 | ||
Estimated gross profit rate | 42% |
1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retail method, presenting details of the computations.
2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profit method, presenting details of the computations.
2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $191,900 of merchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thru November?
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