Chapter 5: Q1E_2. (page 262)
Harris Company has shipped $20,000 of goods to Harlow Co., and Harlow Co. has arranged to sell the goods for Harris. Identify the consignor and the consignee. Which company should include any unsold goods as part of its inventory?
Consignor: Harris Company
Consignee: Harlow Co.
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What factors contribute to (or cause) inventory shrinkage?
Wayward Company wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Wayward’s gross profit rate averages 34%. The following information for the first quarter is available from its records.
January 1, beginning inventory | $302,580 |
Cost of goods purchased | 941,040 |
Sales | 1,211,160 |
Sales Return | 8,410 |
Required
Use the gross profit method to estimate the company’s first-quarter ending inventory.
In 2017, Dakota Company had net sales (at retail) of \(260,000. The following additional information is available from its records at the end of 2017. Use the retail inventory method to estimate Dakota’s 2017 ending inventory at cost.
At Cost | At Retail | |
Beginning Inventory | \)63,800 | $128,400 |
Cost of goods purchased | 115,060 | 196,800 |
Refer to the information in Problem 5-1A and assume the periodic inventory system is used. Required
4. Compute gross profit earned by the company for each of the four costing methods in part 3.
Question: Comparative figures for Apple and Microsoft follow
| \( million | Apple | Microsoft | ||||
| Current year | One year Prior | Two years prior | Current year | One year Prior | Two years prior | |
Inventory | \)2,349 | \(2,111 | \)1,764 | \(2,902 | \)2,660 | $1,938 |
Cost of Sales | 140,089 | 112,258 | 106,606 | 33,038 | 27,078 | 20,385 |
Required
Comment on and interpret your findings from parts 1 and 2. Assume an industry average for inventory turnover of 15.
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