WEEK5Project - Greene Company Cost Beginning Inventory...

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Part 1 Page 1 PART 1 A 76000 Purchases 144000 Less: Purchase returns and allowances 4800 Freight-in 6800 Total merchandise available at cost 222000 Less Cost of goods sold 160000 Ending inventory 62000 Less Undamaged goods 21800 Estimated fire loss 40200 Gross Profit = 25% / [100% + 25%] 20% of sales Cost of goods sold = 80% of sales of $200000 160000 The cost of goods destroyed is $160200 Merchandise on hand January 1 st
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Part 1 Page 2 PART 1 B Cost of goods sold = 75% of sales of $200000 150000 Total merchandise available at cost 72000 Less Undamaged goods 21800 Estimated fire loss 50200 The cost of goods destroyed, assuming that the gross profit Is 25% of sales is $50200
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Unformatted text preview: Greene Company Cost Beginning Inventory 50000 Purchases (net) 343750 Totals 393750 Add Net Markups Markups Markup Cancellations Totals 393750 Deduct Net Markdowns Markdowns Markdown Cancellations Sales price of goods available Deduct Sales (net) Ending inventory at retail Cost to retail ratio = 393750 625000 = 63% Ending inventory at lower of cost or market = Cost to retail ratio * ending inventory at retail = 63% * $67500 = 42525 Org. price of goods available + net markups Part 2 Page 4 Retail 70000 535000 605000 23750 3750 20000 <-----------------> 625000 8750 1250 7500 617500 550000 67500 * 100%...
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This note was uploaded on 11/03/2010 for the course AC550 505 taught by Professor Weiss during the Summer '09 term at Keller Graduate School of Management.

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WEEK5Project - Greene Company Cost Beginning Inventory...

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