question archive Purchases 4,120,000 Purchase returns 60
Purchases 4,120,000 Purchase returns 60
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Purchases 4,120,000 Purchase returns 60.000 Sales 5.600.000 Sales returns 400.000 Sales allowances 100,000 Using the gross profit method, what is the estimated cost of goods sold for the ten months ended October 31, 2012? PROBLEM 5-27 (AICPA Adapted) On September 30, 2012, a fire at Elusive Company's only warehouse cause severe damage to its entire inventory. Based on recent history, the entity has a gross profit of 30% on cost of sales. The following information is available from the records for the nine months ended September 30, 2012: Inventory - January 1 550,000 Purchases 3,000.000 Net sales 3.640.000 A physical inventory disclosed usable damaged goods which can be sold to a jobber for P 50.000. Using the gross profit method, what is the estimated cost of goods sold for the nine months ended September 30, 2012? PROBLEM 5-28 (AICPA Adapted) Feint Company began operations on January 1. 2012. The following information is available for the year ended December 31, 2012: Total merchandise purchases 7,000,000 Merchandise inventory at 1,400,000 December 31 Collections from customers 4,000,000 All merchandise is marked to sell at 40% above cost. All sales are credit sales and all receivables are collectible. What is the balance of accounts receivable on December 31, 2012? PROBLEM 5-29 (AICPA Adapted) Certain information relative to the operations for 2012 of Greenhorn Company follows: Account receivable, January 800.000 Accounts receivable collected 2.600.000 Cash sales 500.000 Inventory, January 1 1.200,000 Inventory, December 31 1.100.000 Purchases 2.000.000 Gross profit on sales 900.000 What is the balance of accounts receivable on December 31, 2012? PROBLEM 5-30 (AICPA Adapted) The following data pertain to Hectic Company for the current year: Accounts receivable, January 1 1.100,000 Accounts receivable, December 31 1.300,000 Turnover of accounts receivable 5 to 1 Inventory, January 1 1.800,000 Purchases 4,500,000 Gross profit rate 409% Hint: Net sales = Average accounts receivable x turnover What is the estimated inventory on December 31? PROBLEM 5-31 (AICPA Adapted) Selected information from the accounting records of Vigor Company for the current year follows: Accounts receivable, January 1 900.000
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PROBLEM 5-27
COGS as of Sept. 30, 2012 = 3,640,000 / 130%
= 2,800,000
It is stated that the 30% gross profit is based on cost so instead of multiplying the total sales amount by 70%, you divide it by 130% to come up with the COGS amount.
PROBLEM 5-28
| Purchases | 7,000,000.00 |
| Ending Inventory | (1,400,000.00) |
| COGS | 5,600,000.00 |
| Multiply by: 100 + GPR | 140% |
| Total Sales | 7,840,000.00 |
| Total Sales | 7,840,000.00 |
| Collections | 4,000,000.00 |
| Ending AR | 3,840,000.00 |
PROBLEM 5-29
| Inventory, Jan 1 | 1,200,000.00 |
| Purchases | 2,000,000.00 |
| Less: Inventory, Dec 31 | (1,100,000.00) |
| COGS | 2,100,000.00 |
| Gross profit on sales | 900,000.00 |
| Total Sales | 3,000,000.00 |
| Less: Cash Sales | (500,000.00) |
| Credit Sales | 2,500,000.00 |
| Accounts Receivable , Jan 1 | 800,000.00 |
| Credit Sales | 2,500,000.00 |
| Less: Collections | (2,600,000.00) |
| Accounts Receivable , Dec 31 | 700,000.00 |
PROBLEM 5-30
AR Turnover = 5:1 (or 5)
Average AR = (1,100,000+1,300,000)/2
= 1,200,000
Net Sales = 5*1,200,000
= 6,000,000
| Sales | 6,000,000.00 |
| Multiply by: Cost rate (100%-40%) | 60% |
| COGS | 3,600,000.00 |
| Inventory, Jan 1 | 1,800,000.00 |
| Purchases | 4,500,000.00 |
| COGS | (3,600,000.00) |
| Inventory, Dec 31 | 2,700,000.00 |
Step-by-step explanation
The highlighted amounts are the final answers. The explanations are included above. Hope this helps.
