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Quiz On Gross Profit Method (Theory and Problem)
Quiz On Gross Profit Method (Theory and Problem)
Naomi Company:
2. Benjie Company:
BI – 500,000
Purchases – 2,500,000
TGAS = 3,000,000
COGS = 2,400,000 [3,200,000 x (1 – 25%)]
EI = 600,000
Less: Physical Ending Inventory (500,000)
Estimated cost of missing inventory = 100,000
3. Bernice Company:
BI – 300,000
Purchases = 2,080,000 (workback)
TGAS = 2,380,000
COGS = 2,200,000 (2,750,000 x (1 - 20%)
Ending Inventory = 180,000
4. Charma Company:
Net sales = 1,800,000
Times: Gross Margin – 40%
Initial COGS = 1,080,000
Add: Ending inventory = 120,000
COGS = 1,200,000
5. Classy Company:
Inventory – Jan. 1 = 5,500,000
Purchases = 4,300,000
Purchase return – 200,000
Net Purchases = 4,100,000
TGAS = 9,600,000
COGS = 6,000,000 (7,500,000 / 1.25)
Estimated cost of inventory = 3,600,000
9. Mira Company:
BI – 400,000
Purchases – 4,800,000
TGAS = 5,200,000
COGS = 4,650,000 [6,200,000 x (1.0 – 25%)]
EI = 550,000
Less: Damaged inventory = 50,000
Inventory = 500,000
Times: 70% reimbursement loss
Explosion Loss: 150,000