Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 8, Problem 1R
On September 30, 2013, the general ledger of Leonʼs Golf Shop, which uses the calendar year as its accounting period, showed the following year-to-date account balances:
The merchandise inventory account had a $48,000 balance on January 1, 2013. The historical gross profit percentage is 40%.
Leon prepares quarterly financial statements and takes physical inventory once a year–at the end of the accounting period. In order to prepare the financial statements for the third quarter, the store needs to have an estimate of ending inventory. You have been asked to use the gross profit method to estimate the ending inventory. Review the worksheet called GP. Study it carefully because it may have a solution format somewhat different from the one shown in your textbook.
Expert Solution & Answer
To determine
Compute the ending inventory using the gross profit method.
Explanation of Solution
Compute the ending inventory using the gross profit method:
Table (1)
The formulae used in the table are given below:
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Chapter 8 Solutions
Excel Applications for Accounting Principles
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