Exercise 9-19 Presented below is information related to Flint Corporation for th
ID: 2589621 • Letter: E
Question
Exercise 9-19
Presented below is information related to Flint Corporation for the current year.
Compute the ending inventory, assuming that (a) gross profit is 46% of sales, (b) gross profit is 60% of cost, (c) gross profit is 36% of sales, and (d) gross profit is 25% of cost. (Round ratios for computational purposes to 1 decimal place, e.g. 78.7% and final answers to 0 decimal places, e.g. 28,987.)
Ending Inventory
Beginning inventory $ 606,900 Purchases 1,503,500 Total goods available for sale $2,110,400 Sales revenue 2,585,000Explanation / Answer
Solution:
a. Gross profit is 46% of sales
Total cost of goods available for sale 2110400
Less: COGS
Sales 2585000
Less gross profit (1189100) (1395900)
Ending Inventory 714500
b. Gross Profit is 60% of cost
Conversion:
60% / (100% + 60%) = 37.50%(gross profit as % of sales)
Total cost of goods available for sale 2110400
Less: COGS
Sales 2585000
Less gross profit (969375) (1615625)
Ending Inventory 494775
Total cost of goods available for sale 2110400
Less: COGS
Sales 2585000
Less gross profit (930600) (1654400)
Ending Inventory 456000
d. Gross profit is 25% of cost
Conversion:
25% / (100% + 25%) = 20.00%(gross profit as % of sales)
Total cost of goods available for sale 2110400
Less: COGS
Sales 2585000
Less gross profit (517000) (2068000)
Ending Inventory 42400
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