As a result of taking a physical inventory count on December 31, 2004, the Chuckles...
70.2K
Verified Solution
Link Copied!
Question
Accounting
As a result of taking a physical inventory count on December 31, 2004, the Chuckles Company inventory was determined to be $82,500. The auditors for Chuckles suspected an inventory shortage and used the gross profit method to estimate the ending inventory. The accounting records for the company contained the following information:
Inventory (1/1/04)
$ 130,000
Purchases (2004)
760,000
Sales (2004)
1,020,000
Sales Returns (2004)
60,000
Gross Profit Ratio
30% of sales
Using the gross profit method, what did the auditors estimate as the amount of the inventory shortage at December 31, 2004?
a.
$240,000
b.
$100,000
c.
$135,500
d.
$170,000
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
