Question
In this problem you are provided with a Trial Balance as of March 31, 2018 . Notice: in the 3/31/18 Trial Balance there are details
In this problem you are provided with a "Trial Balance" as of March 31, 2018.
Notice: in the 3/31/18 Trial Balance there are details provided for the following:
Beginning Inventory: $75,000 (they show this was last year's ending at 12/31/17).
Purchases: $52,000 (for the first three months of 2018: 1/1/18 - 3/31/18)
Sales Revenue: $135,000 (for the first three months of 2018: 1/1/18 - 3/31/18)
Notice: You could use the above information for an analysis of relative sales method
Important: Updating March 31st numbers is required to arrive at the fire loss.
Therefore, you must very closely read the additional information in items 2, 3 and 4 to update sales and purchases through April 15th.
Also notice: a gross profit margin percentage must be estimated.
This can be accomplished using the information in item 5 as shown below:
Total Sales for two years.....................$920,000100%
Cost of Goods Sold see below........... (506,000) 55%
Gross Profit 2 years Overall$414,00045%
Beginning Inventory 1/1/16............. $66,000
Net Purchases 2 years......................515,000
Total Available..................................581,000
Less Ending Inventory 12/31/17....(75,000)
Cost of Goods Sold for 2 years....... $506,000
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