Royal Gorge Company uses the gross profit method to estimate ending inventory an

Question

Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,600. The following information for the month of November was available from company records:

In addition, the controller is aware of $8,500 of inventory that was stolen during November from one of the company

Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,600. The following information for the month of November was available from company records:

Explanation / Answer

1)

Beginning Inventory 58600 Plus Net Purchases 106500           Freight -in 3100 Cost of goods available for sale 168200 Less: Cost of goods sold Net sales 179500 Less: Estimated Gross Profit 71800 Estimated cost of goods sold 107700 -107700 Estimated cost of inventory before theft 60500 Less Stolen Inventory -8500 Estimated Ending Inventory 52000

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