Estimating ending inventory (Learning Objective 7) 15–20 min.

Pugliese Enterprises lost its entire inventory in a hurricane that occurred on October 31, 2014. Over the past five years, gross profit has averaged 42% of net sales. The company’s records reveal the following data for the month of October:

$ 43,600 420,900 743,200 58,300 3,500 Beginning Inventory............................................................................................

Net Purchases.....................................................................................................

Sales ...................................................................................................................

Sales Returns and Allowances ............................................................................

Sales Discounts ..................................................................................................

Requirements 1. Estimate the October 31 inventory, using the gross profit method.

2. Prepare the October income statement through gross profit for Pugliese Enterprises.

AppendixLO1