Over the last two years, McBride Company has averaged 35 percent gross profit. At the end of
Question:
Over the last two years, McBride Company has averaged 35 percent gross profit. At the end of 2016, the auditor found the following data in the records of the company:
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Inquiry by the auditor revealed that employees of McBride Company had estimated the inventory on December 31, 2016, instead of taking a complete physical count.
INSTRUCTIONS
Using the gross profit method of inventory estimation, verify the reasonableness (or lack of reasonableness) of the inventory estimate made by the company's employees.
Analyze:
If a physical inventory count on December 31, 2016, revealed an ending inventory of $520,000, calculate the gross profit percentage.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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Related Book For 
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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