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1) Estimating Inventory Using Gross Profit Method Assume that we are auditing the records of Forde Corporation

Accounting

1) Estimating Inventory Using Gross Profit Method Assume that we are auditing the records of Forde Corporation. A physical inventory has been taken by the company under our observation. However, the valuation extensions have not been completed. The records of the company show the following account data. The gross margin last period was 35% of net sales; we anticipate that it will be 25% for the year under audit. 
Sales, gross                           $540,000
Sales returns (returned to inventory)  $8,000
Purchases, gross          $248,000 
Beginning inventory       $160,000
Freight-in                        $11,200
Purchase returns and allowances  $3,200 
Estimate the cost of ending inventory using the gross profit method. 

 

2) If Tonya purchased 200 decorative pillows at $12 each and sold 75 of the pillows for $20 each, what is the cost of goods sold?

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