Question
Bramble Corporations retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered
Bramble Corporations retail store and warehouse closed for an entire weekend while the year-end inventory was counted. When the count was finished, the controller gathered all the count books and information from the clerical staff, completed the ending inventory calculations, and prepared the following partial income statement for the general manager for Monday morning:
Sales | $ | 2,751,000 | |||||
Beginning inventory | $ | 654,000 | |||||
Purchases | 1,540,000 | ||||||
Total goods available for sale | 2,194,000 | ||||||
Less ending inventory | 654,000 | ||||||
Cost of goods sold | 1,540,000 | ||||||
Gross profit | $ | 1,211,000 |
The general manager called the controller into her office after quickly reviewing the preliminary statements. Youve made an error in the inventory, she stated. My pricing all year has been carefully controlled to provide a gross profit of 35%, and I know the sales are correct. (a) How much should the ending inventory have been?
Expected ending inventory |
??
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started