Retail Method; Gross Profit MethodSelected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are asfollows:CostRetailCelebrity TanMerchandise inventory, August 1$354,000$520,000Transactions during August:Purchases (net)Sales4,066,0005,980,0006,152,000Ranchworks Co.Merchandise inventory, March 1$285,000Transactions during March through November:Purchases (net)3,786,000Sales5,915,000Estimated gross profit rate35% 1. Determine the estimated cost of the merchandise inventory of Celebrity Tan on August 28 by the retailmethod, presenting details of the computations.Celebrity TanCost of the Merchandise InventoryAugust 31Cost$$Ratio of cost to retail price:%Retail2a. Estimate the cost of the merchandise inventory of Ranchworks Co. on November 30 by the gross profitmethod, presenting details of the computations.Ranchworks Co.Cost of the Merchandise InventoryNovember 30ACost$$2b. Assume that Ranchworks Co. took a physical inventory on November 30 and discovered that $212,700 ofmerchandise was on hand. What was the estimated loss of inventory due to theft or damage during March thruNovember?$

1.Calculating cost to retail ratioCostRetailCost to retail ratioMerchandise…

Retail Method; Gross Profit Method Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as follows: Cost Retail Celebrity Tan Merchandise inventory, August 1 $354,000 $520,000 Transactions during August: Purchases (net) Sales 4,066,000 5,980,000 6,152,000 Ranchworks Co. Merchandise inventory, March 1 $285,000 Transactions during March through November: Purchases (net) 3,786,000 Sales 5,915,000 Estimated gross profit rate 35%

Retail Method; Gross Profit Method Selected data on merchandise inventory, purchases, and sales for Celebrity Tan and Ranchworks Co. are as follows: Cost Retail Celebrity Tan Merchandise inventory, August 1 $354,000 $520,000 Transactions during August: Purchases (net) Sales 4,066,000 5,980,000 6,152,000 Ranchworks Co. Merchandise inventory, March 1 $285,000 Transactions during March through November: Purchases (net) 3,786,000 Sales 5,915,000 Estimated gross profit rate 35%

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 7PA: Retail method; gross profit method Selected data on inventory, purchases, and sales for Celebrity...

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