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    Inventory - Gross Profit - Retail Method

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    aleywaley
    1. The Grace Company had a beginning inventory of $500,000 and net purchases of $2,500,000. Its ending inventory was $600,000 but a physical count found $575,000, leaving $25,000 missing. 2. The Kean Company had beginning inventory of $5,000,000 and purchases of $26,000,000 plus freight. Its cost of goods sold was $22,200,000 at a 60% cost ratio. Its ending inventory was $5,800,000. 3. The Bourne Company had beginning inventory of $1,650,000 at cost and $2,200,000 at retail. Its net purchases were $3

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    Inventory - Gross Profit - Retail Method

    Uploaded by

    aleywaley
    35 views6 pages
    1. The Grace Company had a beginning inventory of $500,000 and net purchases of $2,500,000. Its ending inventory was $600,000 but a physical count found $575,000, leaving $25,000 missing. 2. The Kean Company had beginning inventory of $5,000,000 and purchases of $26,000,000 plus freight. Its cost of goods sold was $22,200,000 at a 60% cost ratio. Its ending inventory was $5,800,000. 3. The Bourne Company had beginning inventory of $1,650,000 at cost and $2,200,000 at retail. Its net purchases were $3

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    1. The Grace Company had a beginning inventory of $500,000 and net purchases of $2,500,000. Its ending inventory was $600,000 but a physical count found $575,000, leaving $25,000 missing. 2. The Kean Company had beginning inventory of $5,000,000 and purchases of $26,000,000 plus freight. Its cost of goods sold was $22,200,000 at a 60% cost ratio. Its ending inventory was $5,800,000. 3. The Bourne Company had beginning inventory of $1,650,000 at cost and $2,200,000 at retail. Its net purchases were $3

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    35 views6 pages

    Inventory - Gross Profit - Retail Method

    Uploaded by

    aleywaley
    1. The Grace Company had a beginning inventory of $500,000 and net purchases of $2,500,000. Its ending inventory was $600,000 but a physical count found $575,000, leaving $25,000 missing. 2. The Kean Company had beginning inventory of $5,000,000 and purchases of $26,000,000 plus freight. Its cost of goods sold was $22,200,000 at a 60% cost ratio. Its ending inventory was $5,800,000. 3. The Bourne Company had beginning inventory of $1,650,000 at cost and $2,200,000 at retail. Its net purchases were $3

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    GRACE COMPANY

    BEGINNING INVENTORY 500,000


    ADD: NET PURCHASES 2,500,000
    G.A.S. 3,000,000
    COGS (P3,200,000 X 75%) 2,400,000
    ENDING INVENTORY 600,000
    PHYSICAL COUNTING BALANCE 575,000
    MISSING INVENTORY 25,000

    KEAN COMPANY

    BEGINNING INVENTORY 5,000,000


    ADD: PURCHASES 26,000,000
    FREIGHT IN 2,000,000
    LESS: PUR. RET. AND ALLOW. (3,500,000)
    PUR. DIS. (1,500,000)
    G.A.S. 28,000,000

    SALES 40,000,000
    SALES RETURN (3,000,000)
    NET SALES 37,000,000
    COST RATIO 60%
    C.O.G.S. 22,200,000

    AMOUNTS PERCENTAGES
    NET SALES 37,000,000 100%
    C.O.G.S. 22,200,000 60%
    GROSS PROFIT 14,800,000 40%

    G.A.S. 28,000,000 B.I.


    C.O.G.S. 22,200,000 ADD:
    ENDING INVENTORY 5,800,000
    PHYSICAL COUNT (4,000,000) GAS
    GOODS OUT ON CONSIGNMENT (600,000) LESS:
    SHORTAGE 1,200,000 COGS

    BRAVO COMPANY

    A/R
    BEG. BAL. 700,000 1,100,000 END. BAL.
    CR. SALES 8,400,000 COLLECTION
    700,000 9,500,000
    8,800,000
    SALES ON CREDIT 8,800,000
    CASH SALES 900,000
    TOTAL SALES 9,700,000

    BEG. INVENTORY 1,500,000


    ADD: PURCHASES 5,500,000
    G.A.S. 7,000,000
    C.O.G.S 5,820,000
    END. INVENTORY (LOSS) 1,180,000

    EMPIRE COMPANY

    C.O.G.S. (P3,000,000 X 70%) 2,100,000 1.

    R.M. - BEG. 300,000


    PURCHASES 1,000,000
    FREIGT IN 100,000
    R.M.A. FOR USE 1,400,000
    R.M. - END. 600,000
    R.M. USED 800,000
    D.L. 800,000
    M.O.H. 400,000
    MANUFACTURING COST 2,000,000
    G.I.P. - BEG. 1,000,000
    TOTAL GOODS IN PROCESS 3,000,000
    G.I.P. - END. 1,300,000 3.
    C.O.G.M. 1,700,000 2.
    F.G. - BEG. 1,400,000
    G.A.S. 3,100,000
    F.G. - END 1,000,000
    C.O.G.S. 2,100,000

    JANJAN COMPANY

    COST RETAIL
    BEGINNING INVENTORY 650,000 1,200,000
    PURCHASES 9,000,000 14,700,000
    FREIGHT IN 200,000
    PUR. RET. (300,000) (500,000)
    PUR. ALLOW. (150,000)
    DEP. TRANS. IN 200,000 300,000
    MARK UP 400,000
    MARK UP CANCELATION (100,000)
    GOODS AVAILABLE - CONSERVATIVE 9,600,000 16,000,000
    M.D. (1,200,000)
    M.D. CANCELATION 200,000
    GOODS AVAILABLE - AVERAGE 9,600,000 15,000,000
    SALES (9,500,000)
    EMPLOYEE DISCOUNT (500,000)
    NORMAL SHOPLIFTING LOSS (600,000)
    NORMAL SHRINKAGE (400,000)
    ENDING INVENTORY IN RETAIL 4,000,000

    DENVER COMPANY

    COST RETAIL
    BEGINNING INVENTORY 720,000 1,000,000
    PURCHASES 4,080,000 6,300,000
    NET MARK UPS 700,000
    NET MARK DOWN (500,000)
    GOODS AVAILABLE - AVERAGE 4,800,000 7,500,000
    SALES (6,820,000)
    EST. SHOPLIFTING LOSS (80,000)
    ENDING INVENTORY IN RETAIL 600,000

    AVE. COST RATIO (P4,800,000/P7,500,000) 64%


    AVE. COST 384,000

    DOMAIN COMPANY

    BEG. INVENTORY 180,000


    PURCHASES 6,000,000
    PUR. RET. (300,000)
    NET MARK UP 900,000
    NET MARK DOWN (140,000)
    ABNORMAL SHORTAGE (200,000)
    G.A.S. - RETAIL 6,440,000
    SALES (3,600,000)
    SALES RETURN 90,000
    EMPLOYEE DISCOUNT (80,000)
    NORMAL SHORTAGE (130,000)
    ENDING INVENTORY AT RETAIL 2,720,000

    BOURNE COMPANY

    COST RETAIL
    BEG. INVENTORY 1,650,000 2,200,000
    NET PURCHASES 3,725,000 4,950,000
    DEPARTMENTAL TRANSFER - CREDIT (200,000) (300,000)
    NET MARK UP 150,000
    MARK DOWN (P500,000 - P400,000) (100,000)
    G.A.S. - RETAIL 5,175,000 6,900,000
    SALES (4,000,000)
    EMPLOYEE DISCOUNT (200,000)
    INVENTORY SHORTAGE (100,000)
    ENDING INVENTORY AT RETAIL 2,600,000

    AVE. COST RATIO 75%


    AVE. COST 1,950,000

    GLOO COMPANY

    COST RETAIL
    BEGINNING INVENTORY 80% 1,200,000 1,500,000
    NET PURCHASES 4,200,000 5,900,000
    NET MARK UP 200,000
    NET MARK DOWN (100,000)
    NET PURCHASES 70% 4,200,000 6,000,000

    G.A.S. 5,400,000 7,500,000


    NET SALES (5,500,000)
    FIFO ENDING 1,400,000 2,000,000

    LIFO RETAIL METHOD

    BEG. INVENTORY 1,200,000 1,500,000


    INCREASE (P2,000,000 - P1,500,000) X 70% 350,000 500,000
    LIFO ENDING INVENTORY 1,550,000 2,000,000
    NET PURCHASES
    FREIGHT IN
    28,000,000
    ENDING INVENTORY 5,800,000
    22,200,000
    CONSERVATIVE COST RATIO 60%
    CONSERVATIVE COST 2,400,000 1.

    AVE. COST RATIO 64%


    AVE. COST 2,560,000 2.

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