11) Blue Moon Company has the following data for the year:
Beginning inventory
$80,000
Net purchases
$115,000
Net sales revenue
$200,000
Normal gross profit percentage
45%
What is the estimated ending inventory?
A) $65,000
B) $80,000
C) $85,000
D) $105,000
12) The following data are for Tina’s Candy Store for January:
Beginning inventory
$215,000
Net sales revenue
$440,000
Net purchases
$605,000
Normal gross profit rate
40%
What is the company’s estimated cost of goods sold for the month?
A) $165,000
B) $176,000
C) $225,000
D) $264,000
13) The following data are for Tina’s Candy Store for January:
Beginning inventory
$215,000
Net sales revenue
$440,000
Net purchases
$605,000
Normal gross profit rate
40%
What is the company’s estimated ending inventory for the month?
A) $105,000
B) $156,000
C) $210,000
D) $244,000
14) Wendy Industries has the following information available for March:
Total sales
$810,000
Purchases
$440,000
Beginning inventory
$212,000
Ending inventory
??
Cost of goods sold
60% of sales
Calculate Wendy’s ending inventory.
Answer:
Beginning inventory
$212,000
Plus purchases
440,000
Equals goods available for sale
652,000
Less ending inventory
652,000 – 486,000
166,000
Equals cost of goods sold
.60 * 810,000
486,000
15) The Fence Company needs to determine the amount of its purchases for the month. It has the following information available for March:
Cost of goods sold anticipated for March
$10,000
Desired ending inventory for March
$2,000
Beginning inventory for March
$3,000
Determine the amount of purchases necessary to achieve the desired ending inventory.
16) A recent fire destroyed the inventory of The Candle Store. The accountant is preparing an estimate of the loss for the insurance company and has gathered the following from the records of the company:
Beginning inventory$48,000
Purchases71,000
Net sales110,000
Estimated gross profit25%
Prepare a schedule to compute the amount of the inventory lost in the fire.
17) Puff Company has the following information available for March:
Net purchases$376,000
Net sales revenue$610,000
Beginning inventory$ 95,500
Gross profit percentage35%
Estimate the cost of Puff’s ending inventory.
18) Healthy Food, Inc. has the following items for August:
Normal gross profit of 40%
Net sales revenue of $637,500
Net purchases of $289,600
Beginning inventory is $210,800
Calculate the ending inventory using the gross profit method.
19) ABC, Inc. began the year with $250,000 of inventory and purchased $1,500,000 of goods during the year. Sales for the year were $2,750,000 and the gross profit percentage is 45%. Compute the company’s estimated cost of ending inventory by using the gross profit method. How can this estimate be checked for accuracy?
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