Henderson Company uses the gross profit method to estimate endinginventory and cost of goods sold when preparing monthly financialstatements required by its bank. Inventory on hand at the end of July was$119,000. The following information for the month of August was availablefrom company records:PurchasesFreight-inSalesSales returnsPurchases returns$ 212,0004,500343,0008,3003,600In addition, the controller is aware of $12,000 of inventory that was stolenduring August from one of the company's warehouses.1. Estimated ending inventory2. Estimated ending inventoryRequired:1. Calculate the estimated inventory at the end of August, assuming agross profit ratio of 25%.2. Calculate the estimated inventory at the end of August, assuming amarkup on cost of 25%.

The gross profit method is an inventory valuation technique used to estimate the ending inventory…

Henderson Company uses the gross profit method to estimate ending nventory and cost of goods sold when preparing monthly financial tatements required by its bank. Inventory on hand at the end of July was $119,000. The following information for the month of August was available rom company records: Purchases Freight-in Sales Sales returns Purchases returns $ 212,000 4,500 343,000 8,300 3,600 n addition, the controller is aware of $12,000 of inventory that was stolen during August from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 25%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%. 1. Estimated ending inventory 2. Estimated ending inventory

Henderson Company uses the gross profit method to estimate ending nventory and cost of goods sold when preparing monthly financial tatements required by its bank. Inventory on hand at the end of July was $119,000. The following information for the month of August was available rom company records: Purchases Freight-in Sales Sales returns Purchases returns $ 212,000 4,500 343,000 8,300 3,600 n addition, the controller is aware of $12,000 of inventory that was stolen during August from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 25%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%. 1. Estimated ending inventory 2. Estimated ending inventory

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter9: Database Management Systems

Section: Chapter Questions

Problem 18P

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