Question

Assume in each case that the selling expenses are $8 per unit and that the normal profit is $5 per unit. Calculate the limits for each case. Then enter the amount that should be used for lower of cost or market.

		Selling Price			Upper Limit		Replacement Cost			Lower Limit		Cost		LCM
(a)		$59			$		$43			$		$47		$
(b)		47					36					40
(c)		60					44					45
(d)		48					42					40

Viewpoint Company’s October 31 inventory was destroyed by fire. The company’s beginning inventory was $500,000, and purchases for January through October were $1,200,000. Sales for the same period were $1,800,000. The company’s normal gross profit percentage is 30% of sales. Using the gross profit method, the October 31 inventory is estimated to be

$40,000.

$540,000.

$300,000.

$440,000.

A fire destroys all of the merchandise of Sandhill Company on February 10, 2017. Presented below is information compiled up to the date of the fire.

Inventory, January 1, 2017		$427,300
Sales revenue to February 10, 2017		2,107,200
Purchases to February 10, 2017		1,068,680
Freight-in to February 10, 2017		62,460
Rate of gross profit on selling price		45%

What is the approximate inventory on February 10, 2017?

Inventory at February 10, 2017

$

Answer 1

Amount in $.

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