close solutoin list

Retail method; gross profit method Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows: Cost Retail Jaffe Co. Merchandise Inventory, February 1 $ 400,000 $ 615,000 Transactions during February: Purchases(net) 4,055,000 5,325,000 Sales 5,100,000 Coronado Co Merchandise Inventory, May 1 $ 400,000 Transactions during May through October: Purchases(net) 3,150,000 Sales 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 de tails 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 inventory due to theft or damage during May through October?

BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
BuyFind

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

Solutions

Chapter
Section
Chapter 7, Problem 7.7BPR
Textbook Problem

Retail method; gross profit method

Selected data on merchandise inventory, purchases, and sales for Jaffe Co. and Coronado Co. are as follows:

  Cost Retail
Jaffe Co.    
Merchandise Inventory, February 1 $ 400,000 $ 615,000
Transactions during February:    
Purchases(net) 4,055,000 5,325,000
Sales   5,100,000
Coronado Co    
Merchandise Inventory, May 1 $ 400,000  
Transactions during May through October:    
Purchases(net) 3,150,000  
Sales 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 de tails 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 inventory due to theft or damage during May through October?

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 7 Solutions

Accounting (Text Only)
Show all chapter solutions
Ch. 7 - Cost flow methods The following three identical...Ch. 7 - Cost flow methods The following three identical...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using weighted average...Ch. 7 - Perpetual inventory using weighted average...Ch. 7 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 7 - Periodic inventory using FIFO, LIFO, and weighted...Ch. 7 - Lower-of-cost-or-market method On the basis of the...Ch. 7 - Lower-of- cost-or-market method On the basis of...Ch. 7 - Effect of inventory errors During the taking of...Ch. 7 - Effect of inventory errors During the taking of...Ch. 7 - Inventory turnover and number of days sales in...Ch. 7 - Inventory turnover and number of days sales in...Ch. 7 - Control of inventories Triple Creek Hardware Store...Ch. 7 - Control of inventories Hardcase Luggage Shop is a...Ch. 7 - Perpetual inventory using FIFO Beginning...Ch. 7 - Perpetual inventory using LIFO Assume that the...Ch. 7 - Perpetual inventory using LIFO Beginning...Ch. 7 - Perpetual inventory using FIFO Assume that the...Ch. 7 - FIFO and LIFO costs under perpetual inventory...Ch. 7 - Weighted average cost flow method under perpetual...Ch. 7 - Weighted average cost flow method under perpetual...Ch. 7 - Perpetual inventory using FIFO Assume that the...Ch. 7 - Perpetual inventory using LIFO Assume that the...Ch. 7 - Periodic inventory by three methods The units of...Ch. 7 - Periodic inventory by three methods; cost of...Ch. 7 - Comparing inventory methods Assume that a firm...Ch. 7 - Lower-of-cost-or-market inventory On the basis of...Ch. 7 - Merchandise inventory on the balance sheet Based...Ch. 7 - Effect of errors in physical inventory Missouri...Ch. 7 - Effect of errors in physical inventory Fonda...Ch. 7 - Error in inventory During 2016, the accountant...Ch. 7 - Inventory turnover The following data (in...Ch. 7 - Inventory turnover and number of days' sales in...Ch. 7 - Retail method A business using the retail method...Ch. 7 - Retail method A business using the retail method...Ch. 7 - Retail method A business using the retail method...Ch. 7 - Retail method On the basis of the following data,...Ch. 7 - Gross profit method The merchandise inventory was...Ch. 7 - Gross profit method Based on the following data,...Ch. 7 - Gross profit method Based on the following data,...Ch. 7 - FIFO perpetual inventory The beginning inventory...Ch. 7 - LIFO perpetual inventory The beginning inventory...Ch. 7 - Weighted average cost method with perpetual...Ch. 7 - Periodic inventory by three methods The beginning...Ch. 7 - Periodic inventory by three methods Dymac...Ch. 7 - Lower-of-cost-or-market inventory Data on the...Ch. 7 - Retail method; gross profit method Selected data...Ch. 7 - FIFO perpetual inventory The beginning inventory...Ch. 7 - LIFO perpetual inventory The beginning inventory...Ch. 7 - Weighted average cost method with perpetual...Ch. 7 - Periodic inventory by three methods The beginning...Ch. 7 - Periodic inventory by three methods Pappas...Ch. 7 - Lower-of-cost-or-market inventory Data on the...Ch. 7 - Retail method; gross profit method Selected data...Ch. 7 - Ethics in Action Anstead Co. is experiencing a...Ch. 7 - LIFO and inventory flows The following is an...Ch. 7 - Costing inventory Golden Eagle Company began...Ch. 7 - Inventory ratios for Dell and HP Dell Inc. and...Ch. 7 - Comparing inventory ratios for two companies...Ch. 7 - Comparing inventory ratios for three companies The...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
Describe Enterprise Risk Management (ERM).

Accounting Information Systems

How does an increase in productivity affect business?

Foundations of Business (MindTap Course List)

What does the HTTP do?

Accounting Information Systems

Classify consumer products

MKTG 12:STUDENT ED.-TEXT

INCOME STATEMENT Little Books Inc. recently reported 3 million of net income. Its EBIT was 6 million, and its t...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

(a) What kind of an account is Purchases Discounts Lost? (b) How is this item reported on the income statement?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Explain why the long-run aggregate-supply curve is vertical.

Principles of Macroeconomics (MindTap Course List)