Question
Sheridan Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May. Inventory, May
Sheridan Company uses the gross profit method to estimate inventory for monthly reporting purposes. Presented below is information for the month of May.
| Inventory, May 1 | $ 159,500 | |
| Purchases (gross) | 593,300 | |
| Freight-in | 32,900 | |
| Sales revenue | 974,400 | |
| Sales returns | 75,900 | |
| Purchase discounts | 10,800 |
Part 1
Compute the estimated inventory at May 31, assuming that the gross profit is 25% of net sales.
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
978-0078025587
