8) Golden Oak Antique Shop has the following account balances at the end of the current accounting period.
Beginning inventory
|
$73,250
|
Net purchases
|
57,650
|
Net sales revenue
|
85,500
|
A normal gross profit for the company is $45%. What is the company's estimated cost of goods sold for the accounting period?
A) $92,425
B) $38,475
C) $47,025
D) $83,875
9) Callahan Computers stores its inventory in a warehouse that burned to the ground in late November, 2012. Their sales office was at a different location. In order to file a claim with their insurance, the owners ask you to estimate the inventory in the warehouse. The following information is available:
Beginning inventory
|
$375,500
|
Purchases through November 30
|
470,250
|
Net sales revenue through November 31
|
793,000
|
The company's gross profit has historically been 40% of net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.
A) $369,950
B) $528,550
C) $410,000
D) $388,450
10) Owens Janitor Supply has the following account balances at the end of the current accounting period.
Beginning inventory
|
$ 50,000
|
Net purchases
|
400,000
|
Net sales revenue
|
500,000
|
A normal gross profit percent is 40%. What is the estimated ending inventory as determined by the gross profit?
A) $150,000
B) $50,000
C) $200,000
D) $300,000
11) The following data is available:
Net sales, first month
|
$13,000
|
Normal gross profit
|
45%
|
Beginning inventory
|
8,000
|
Net purchases
|
7,000
|
Using the gross profit method, the amount of gross profit would be:
A) $15,000.
B) $6,750.
C) $5,850.
D) $3,600.
12) The following data is available:
Net sales, first month
|
$13,000
|
Normal gross profit
|
45%
|
Beginning inventory
|
8,000
|
Net purchases
|
7,000
|
Using the gross profit method, the cost of goods sold would be:
A) $15,000.
B) $7,150.
C) $7,850.
D) $5,850.
13) The following data is available:
Net sales, first month
|
$13,000
|
Normal gross profit
|
45%
|
Beginning inventory
|
8,000
|
Net purchases
|
7,000
|
Using the gross profit method, the estimated ending inventory balance would be:
A) $15,000.
B) $7,150.
C) $7,850.
D) $5,850.
Learning Objective 6-8
1) Using the FIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory.
2) Using the LIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory.
3) Under periodic inventory, the company first calculates Cost of goods sold for the period, and then determines what the Ending inventory balance is.
4) When using periodic inventory, the closing process begins with closing out the Beginning inventory to Cost of goods sold.