Question

A fire destroyed all ABC's merchandise inventory on October 1. On January 1 the balance in...

A fire destroyed all ABC's merchandise inventory on October 1.

On January 1 the balance in inventory was: 2204.

From January 1-October 1

sales were 13224

purchases were 11108.16

the mark up on cost was 34%

The gross profit margin is (as %, e.g. 34.23% would entered as 34.23): Answer

Estimated COGS of inventory destroyed is: Answer

Estimated inventory destroyed: Answer

2.

Beginning inventory has an error of 7. Purchases have an error of -9. Ending inventory has an error of 29. The effect of these combined errors on COGS is:

Answer:

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Answer #1
Q1.
Sales: 13224
Markup on Cost 34%
Cost of goods sold (13224/134%) 9868.66
Gross Profit (Ssales-COGS) 3355.34
Gross Profit margin (GP/Sales*100) 25.37%
Estimated Inventoy destroyed:
Beginning Inventory 2204
Add: Purchases 11108.16
Lless: COGS 9868.66
Inventory in hand destroyed 3443.5
The Gross Profit margin: 25.37
Estimated COGS: 9868.66
Estimated Inventory destroyed: 3443.5
Q2.
COGS ERROR: -31
Explanation:
Beginning Inventory Error 7
Purchases error -9
Total Error -2
Less: Error in ending inventory -29
Error in COGS -31
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