A fire destroyed all ABC\'s merchandise inventory on October 1. On January 1 the

Question

A fire destroyed all ABC's merchandise inventory on October 1.

On January 1 the balance in inventory was: 2204.

From January 1-October 1

sales were 13224

purchases were 11108.16

the mark up on cost was 34%

The gross profit margin is (as %, e.g. 34.23% would entered as 34.23): Answer

Estimated COGS of inventory destroyed is: Answer

Estimated inventory destroyed: Answer

2.

Beginning inventory has an error of 7. Purchases have an error of -9. Ending inventory has an error of 29. The effect of these combined errors on COGS is:

Answer:

Explanation / Answer

Q1. Sales: 13224 Markup on Cost 34% Cost of goods sold (13224/134%) 9868.66 Gross Profit (Ssales-COGS) 3355.34 Gross Profit margin (GP/Sales*100) 25.37% Estimated Inventoy destroyed: Beginning Inventory 2204 Add: Purchases 11108.16 Lless: COGS 9868.66 Inventory in hand destroyed 3443.5 The Gross Profit margin: 25.37 Estimated COGS: 9868.66 Estimated Inventory destroyed: 3443.5 Q2. COGS ERROR: -31 Explanation: Beginning Inventory Error 7 Purchases error -9 Total Error -2 Less: Error in ending inventory -29 Error in COGS -31

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