Chapter 9 LCM ,Gross Profit and Retail Handout Solutions

Chapter 9 LCM ,Gross Profit and Retail Handout Solutions -...

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Chapters 9 Inventory SOLUTIONS: 1. Appropriate Upper Lower Inventory Limit Limit Designated Valuation Item ("Ceiling") ("Floor") Market (Totals) A $1.80 $1.10 $1.10 $3,270 B 1.80 1.10 1.15 3,450 C 1.80 1.10 1.10 3,300 D 1.80 1.10 1.65 4,800 E 1.80 1.10 1.70 5,100 $19,920 . 2. So. California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2006. In preparing their insurance claim on the inventory loss, they developed the following data: Inventory January 1, 2006, $300,000; sales and purchases from January 1, 2006, to May 1, 2006, $1,300,000 and $875,000, respectively. So. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2006, is: A) $302,500. B) $360,000. C) $395,000. D) $455,000. Answer: C Rationale: Beginning inventory $300,000 Plus: Net purchases 875,000 Goods available for sale 1,175,000 Less: Cost of goods sold: Net sales $1,300,000 Less: Estimated gross profit (520,000 ) Estimated cost of goods sold (780,000
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This note was uploaded on 12/03/2009 for the course ACG 3131 taught by Professor Rotella during the Spring '08 term at University of Central Florida.

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Chapter 9 LCM ,Gross Profit and Retail Handout Solutions -...

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