Help me asap.Please don't use any AI.It's strictly prohibited otherwise I will report the solution. ]5Computing Gross Profit and Cost Percentages Given Ending Inventory BalancesHarris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimatesending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available.Inventory, January 1 (based on physical count) $54,000Inventory, March 31 (estimated)24,000Inventory, June 30 (estimated)70,800Purchases, first quarter150,000Purchases, second quarter210,000Net sales, first quarter240,000Net sales, second quarter216,000RequiredCompute the following percentages.a. Gross profit as a percentage of sales for the first quarter.Numerator/DenominatorResult$540,000/$96b. Gross profit as a percentage of cost for the first quarter.Numerator/DenominatorResult0 / $0 =96c. Gross profit as a percentage of sales for the second quarter.Numerator/DenominatorResult$0 / $0%d. Gross profit as a percentage of cost for the second quarter.Numerator/DenominatorResult$0 / $0%13Q

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Answered: ] 5 Computing Gross Profit and Cost…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter20: Accounting For Inventory

Section: Chapter Questions

Problem 3AP

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5
Computing Gross Profit and Cost Percentages Given Ending Inventory Balances
Harris Inc., with a December 31 year-end, uses a periodic inventory system. Because its physical inventory count takes place at year-end only, Harris estimates
ending inventory for its quarterly reports using the gross profit method. The following information for the first two quarters of the year is available.
Inventory, January 1 (based on physical count) $54,000
Inventory, March 31 (estimated)
24,000
Inventory, June 30 (estimated)
70,800
Purchases, first quarter
150,000
Purchases, second quarter
210,000
Net sales, first quarter
240,000
Net sales, second quarter
216,000
Required
Compute the following percentages.
a. Gross profit as a percentage of sales for the first quarter.
Numerator/Denominator
Result
$
540,000/$
96
b. Gross profit as a percentage of cost for the first quarter.
Numerator/Denominator
Result
0 / $
0 =
96
c. Gross profit as a percentage of sales for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
d. Gross profit as a percentage of cost for the second quarter.
Numerator/Denominator
Result
$
0 / $
0
%
13
Q

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Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of 250,000. During the year, it made 613,000 of net purchases. At the end of the year, a physical inventory showed it had ending inventory of 140,000. Calculate Reid Companys cost of goods sold for the year.
LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-1B. Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. 2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost on June 30.
Carla Company uses the perpetual inventory system. The following information is available for January of the current year when Carla sold 1,600 units of inventory on January 14. Using the FIFO method, calculate Carlas cost of goods sold for January and its January 31 inventory.
Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows: There are 1,200 units of inventory on hand on December 31, 20-2. REQUIRED 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places) 2. Assume that the market price per unit (cost to replace) of Hursts inventory on December 31 was 18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: (a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of 100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.
Financial statement data for years ending December 31 for Holland Company follow: a. Determine the inventory turnover for 20Y4 and 20Y3. b. Determine the days sales in inventory for 20Y4 and 20Y3. Use 365 days and round to one decimal place. c. Does the change in inventory turnover and the days sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable trend?
FIFO perpetual inventory The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are as follows: Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 3, using the first-in, first-out method. 2. Determine the total sales and the total cost of goods sold for the period. Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account. 3. Determine the gross profit from sales for the period. 4. Determine the ending inventory cost on June 30. 5. Based upon the preceding data, would you expect the ending inventory using the last-in, first-out method to be higher or lower?
Periodic Inventory System Raynolde Company uses a periodic inventory system. At the end of the year, the following information is available: Required: Prepare a schedule to compute Raynoldes cost of goods sold.
Alternative Inventory Methods Park Companys perpetual inventory records indicate the following transactions in the month of June: Required: 1. Compute the cost of goods sold for June and the inventory at the end of June using each of the following cost flow assumptions: a. FIFO b. LIFO c. Average cost (Round unit costs to 3 decimal places and other amounts to the nearest dollar.) 2. Next Level Why are the cost of goods sold and ending inventory amounts different for each of the three methods? What do these amounts tell us about the purchase price of inventory during the year? 3. Next Level Which method produces the most realistic amount for net income? For inventory? Explain your answer. 4. Next Level If Park uses IFRS, which of the previous alternatives would be acceptable and why?
Jessie Stores uses the periodic system of calculating inventory. The following information is available for December of the current year when Jessie sold 500 units of inventory. Using the FIFO method, calculate Jessies inventory on December 31 and its cost of goods sold for December.
Alternative Inventory Methods Nevens Company uses a periodic inventory system. During November, the following transactions occurred: Required: 1. Compute the cost of goods sold for November and the inventory at the end of November for each of the following cost flow assumptions: a. FIFO b. LIFO c. Average cost 2. Next Level What can you conclude about the effects of the inventory cost flow assumptions on the financial statements?
Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows: Instructions 1. Determine the cost of the inventory on December 31 by the first-in, first-out method. Present data in columnar form, using the following headings: If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. 2. Determine the cost of the inventory on December 31 by the last-in, first-out method, following the procedures indicated in (1). 3. Determine the cost of the inventory on December 31 by the weighted average cost method, using the columnar headings indicated in (1). 4. Discuss which method (FIFO or LIFO) would be preferred for income tax purposes in periods of (a) rising prices and (b) declining prices.

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