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3B In 2019 and 2020, Highway Monkey Inc. had gross profit of 40% and 30%, respectively. At the end of the year 2021, the auditor
| 3B | In 2019 and 2020, Highway Monkey Inc. had gross profit of 40% and 30%, respectively. At the end of the year 2021, the auditor found the following data in the records of the company for the year ending December 31, 2021: | ||
| $ 1,540,000 | ||
| Beginning Inventory | $ 105,000 | ||
| Purchases | $ 1,045,000 | ||
| Ending Inventory | $ 151,000 | ||
| A quick inquiry revealed that the employees of the company estimated the inventory for 2021 rather than taking a complete physical count. | |||
| a | Using the gross profit method of inventory estimation, verify whether the estimattion made by the employees were reasonable for 2021. | ||
| b | If the ending inventory on Dec 31, 2021 was $130,000, what would be the gross margin for the company in 2021? |
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Intermediate Accounting Volume 2
Authors: Thomas H. Beechy
5th Edition
0071091319, 978-0071091312
