Sporting Pro wants to prepare interim financial statements for the first quarter of 2020 but would like

Question:

Sporting Pro wants to prepare interim financial statements for the first quarter of 2020 but would like to avoid making a physical count of inventory. During the last five years, the company’s gross profit rate has averaged 47%. The following information for the year’s first quarter is available from its records:

January 1 beginning inventory ............................... $ 350,260
Purchases .................................................................... 995,200
Purchase returns .......................................................... 14,050
Transportation-in ............................................................ 7,900
Sales .......................................................................... 1,291,150
Sales returns ................................................................... 9,950


Required

Use the gross profit method to prepare an estimate of the company’s March 31 inventory.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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