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Part 1 Gross Profit Method Horton, Inc. suffere...




Part 1 Gross Profit Method Horton, Inc. suffered an inventory loss due to a flood. The following information is available to you. Beginning inventory $100,000 Net purchase 400,000 Sales 400,000 Inventory salvaged from flood 50,000 Instructions Use the gross profit method for estimating inventory to determine the loss due to the flood, assuming (a) gross profit is 25% of sales, and (b) gross profit is 25% of the cost of goods sold. Part 2 Retail Inventory Method The records of Greene Company report the following data for the month of April. Sales $204,000 Purchases (at cost) $ 96,000 Sales returns 4,000 Purchases (at sales price) 176,000 Additional markups 20,000 Purchase returns (at cost) 4,000 Markup cancellations 3,000 Purchase returns (at sales price) 6,000 Markdowns 18,600 Beginning inventory (at cost) 60,000 Markdown cancellations 5,600 Beginning inventory (at sales price) 93,000 Freight on purchases 2,000 Instructions Compute the ending inventory by the conventional retail inventory method.


Paper#8158 | Written in 18-Jul-2015

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