Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $125,000. The following information for the month of August was available from company records: Purchases Freight-in Sales Sales returns Purchases returns $ 224,000 5,700 355,000 9,500 4,800 In addition, the controller is aware of $12,000 of inventory that was stolen during August from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 25%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.

Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of July was $125,000. The following information for the month of August was available from company records: Purchases Freight-in Sales Sales returns Purchases returns $ 224,000 5,700 355,000 9,500 4,800 In addition, the controller is aware of $12,000 of inventory that was stolen during August from one of the company's warehouses. Required: 1. Calculate the estimated inventory at the end of August, assuming a gross profit ratio of 25%. 2. Calculate the estimated inventory at the end of August, assuming a markup on cost of 25%.

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Description: Henderson Company uses the gross profit method to estimate ending inventory and cost ofgoods sold when preparing monthly financial statements required by its bank. Inventory onhand at the end of July was $125,000. The following information for the m

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 19PA: Post the following November transactions to T-accounts for Accounts Payable, Inventory, and Cash,...

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