Question
Paulson Sailing Company sells boats as a supplement to its boat storage operations. Data for its boat sales for August 20X1 are given below. The
Paulson Sailing Company sells boats as a supplement to its boat storage operations. Data for its boat sales for August 20X1 are given below. The beginning inventory on August 1 was composed of the following items:
| Cost | Retail | |||||
| 28' Starfish | $ | 41,000 | $ | 53,000 | ||
| 30' Perch | 61,000 | 81,000 | ||||
| 24' Sea King | 24,000 | 28,000 | ||||
| 30' Holiday | 44,000 | 56,000 | ||||
| 20' Lake King | 26,000 | 32,500 | ||||
Sales during the month were the 30' Holiday and the 20' Lake King, sold at the retail values shown on August 1.
Required:
-
1. Based on the above data, what is the best method of valuing the ending inventory?
2. & 3. Determine the value of Paulson Sailing Company's cost of goods sold and ending inventory of items that were brought over from the beginning inventory using this method. Assume that the company's retail values had not changed.
Analyze: What is the estimated gross profit on sales for August? **PLEASE show the work; that's what I'm stuck on. Thanks!!**
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
Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
22nd Edition
324401841, 978-0-324-6250, 0-324-62509-X, 978-0324401844
