Exercise 9-14 (Part Level Submission) Wildhorse Company uses the gross profit me

Question

Exercise 9-14 (Part Level Submission) Wildhorse Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May 1 Purchases (gross) Freight-in Sales revenue Sales returns Purchase discounts 169,600 677,700 30,300 957,200 74,300 13,100 (b) Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost. (Round percentage of sales to 2 decimal places, eg. 78.74% and final answer to 0 decimal places, eg. 6,225.) The estimated inventory at May 31 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Gross profit=25% of cost(ie 1/4of cost)=1/5 of sales

To beginning inventory 169600 By net sales(957200-74300) 882900 To net purchases(677,700-13100) 664,600 By estimated inventory(balance) $158180 To freight 30300 To gross profit(1/5*882900) 176580 Total $1041080 Total $1041080

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.