Question
The total sales for CARM Company up to December 31, 2016 was $1,000,000. Purchases for the month was $900,000, and freight-in of $40,000. The cost
The total sales for CARM Company up to December 31, 2016 was $1,000,000.
Purchases for the month was $900,000, and freight-in of $40,000.
The cost of beginning inventory was $70,000.
The company typically earns a gross profit of 35 percent.
On the night of December 31st, a fire completely destroyed CARM’s inventory.
Required:
Show your working for each of the following:
a. Using the gross profit method, estimate the amount of ending inventory that was destroyed in the fire. (5 points)
Step by Step Solution
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Step: 1
Beginning inventory 70000 Add Purchase 900000 Add Freight in ...
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Horngrens Accounting
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
10th Canadian edition Volume 1
978-0134213101, 134213106, 133855376, 978-0133855371
