Q27E-1 - Horngren'S Financial And Managerial Accounting

Question

Consider the data of the following companies which use the periodic inventory system:

Company	Net Sales Revenue	Beginning Merchandise Inventory	Net Cost of Purchases	Ending Merchandise Inventory	Cost of Goods Sold	Gross Profit
Large	\( 105,000	\) 23,000	\( 59,000	\) 22,000	(a)	$45,000
Small	(b)	27,000	94,000	(c)	99,000	40,000
Medium	96,000	(d)	58,000	24,000	68,000	(e)
Petite	80,000	8,000	(f)	6,500	(g)	44,000

Requirements

1. Supply the missing amounts in the preceding table.

Step-by-Step Solution

Answer

a) $60,000

b) $139,000

c) $22,000

d) $34,000

e) $28,000

f) $34,500

g) $36,000

Step 1: Missing Value (a)

$\begin{array}{c}\left(a\right)\mathbf{C}\mathbf{O}\mathbf{G}\mathbf{S}\mathbf{=}\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{ }\mathbf{S}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{ }\mathbf{R}\mathbf{e}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{u}\mathbf{e}\mathbf{-}\mathbf{G}\mathbf{r}\mathbf{o}\mathbf{s}\mathbf{s}\mathbf{ }\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{f}\mathbf{i}\mathbf{t}\\ \mathbf{=}\mathbf{\$}\mathbf{105}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{45}\mathbf{,}\mathbf{000}\\ \mathbf{=}\mathbf{\$}\mathbf{60}\mathbf{,}\mathbf{000}\end{array}$

Step 2: Missing Value (b)

$\begin{array}{c}\left(b\right)\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{ }\mathbf{s}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{ }\mathbf{r}\mathbf{e}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{u}\mathbf{e}\mathbf{=}\mathbf{C}\mathbf{O}\mathbf{G}\mathbf{S}\mathbf{+}\mathbf{G}\mathbf{r}\mathbf{o}\mathbf{s}\mathbf{s}\mathbf{ }\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{f}\mathbf{i}\mathbf{t}\\ \mathbf{=}\mathbf{\$}\mathbf{99}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{40}\mathbf{,}\mathbf{000}\\ \mathbf{=}\mathbf{\$}\mathbf{139}\mathbf{,}\mathbf{000}\end{array}$

Step 3: Missing Value (c)

$\begin{array}{rcl}\left(c\right)\mathit{E}\mathit{n}\mathit{d}\mathit{i}\mathit{n}\mathit{g}\mathit{I}\mathit{n}\mathit{e}\mathit{v}\mathit{n}\mathit{t}\mathit{o}\mathit{r}\mathit{y}& \mathbf{=}& \mathit{B}\mathit{e}\mathit{g}\mathit{i}\mathit{n}\mathit{n}\mathit{i}\mathit{n}\mathit{g}\mathit{I}\mathit{n}\mathit{v}\mathit{e}\mathit{n}\mathit{t}\mathit{o}\mathit{r}\mathit{y}\mathbf{+}\mathit{N}\mathit{e}\mathit{t}\mathit{P}\mathit{u}\mathit{r}\mathit{c}\mathit{h}\mathit{a}\mathit{s}\mathit{e}\mathbf{-}\mathit{C}\mathit{O}\mathit{G}\mathit{S}\\ & \mathbf{=}& \mathbf{\$}\mathbf{27}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{94}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{99}\mathbf{,}\mathbf{000}\\ & \mathbf{=}& \mathbf{\$}\mathbf{22}\mathbf{,}\mathbf{000}\\ & & \end{array}$

Step 4: Missing Value (d)

$\begin{array}{c}\left(d\right)\mathbf{B}\mathbf{e}\mathbf{g}\mathbf{i}\mathbf{n}\mathbf{n}\mathbf{i}\mathbf{n}\mathbf{g}\mathbf{ }\mathbf{I}\mathbf{n}\mathbf{e}\mathbf{v}\mathbf{n}\mathbf{t}\mathbf{o}\mathbf{r}\mathbf{y}\mathbf{=}\mathbf{C}\mathbf{O}\mathbf{G}\mathbf{S}\mathbf{+}\mathbf{E}\mathbf{n}\mathbf{d}\mathbf{i}\mathbf{n}\mathbf{g}\mathbf{ }\mathbf{I}\mathbf{n}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{t}\mathbf{o}\mathbf{r}\mathbf{y}\mathbf{-}\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{ }\mathbf{P}\mathbf{u}\mathbf{r}\mathbf{c}\mathbf{h}\mathbf{a}\mathbf{s}\mathbf{e}\mathbf{s}\\ \mathbf{=}\mathbf{\$}\mathbf{68}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{24}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{58}\mathbf{,}\mathbf{000}\\ \mathbf{=}\mathbf{\$}\mathbf{34}\mathbf{,}\mathbf{000}\end{array}$

Step 5: Missing Value (e)

$\begin{array}{c}\left(e\right)\mathbf{G}\mathbf{r}\mathbf{o}\mathbf{s}\mathbf{s}\mathbf{ }\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{f}\mathbf{i}\mathbf{t}\mathbf{=}\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{ }\mathbf{S}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{ }\mathbf{R}\mathbf{e}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{u}\mathbf{e}\mathbf{-}\mathbf{C}\mathbf{O}\mathbf{G}\mathbf{S}\\ \mathbf{=}\mathbf{\$}\mathbf{96}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{68}\mathbf{,}\mathbf{000}\\ \mathbf{=}\mathbf{\$}\mathbf{28}\mathbf{,}\mathbf{000}\end{array}$

Step 6: Missing Value (f)

$\begin{array}{rcl}\left(f\right)\mathit{N}\mathit{e}\mathit{t}\mathit{P}\mathit{u}\mathit{r}\mathit{c}\mathit{h}\mathit{a}\mathit{s}\mathit{e}\mathit{s}& \mathbf{=}& \mathit{C}\mathit{O}\mathit{G}\mathit{S}\mathbf{+}\mathit{E}\mathit{n}\mathit{d}\mathit{i}\mathit{n}\mathit{g}\mathit{I}\mathit{n}\mathit{v}\mathit{e}\mathit{n}\mathit{t}\mathit{o}\mathit{r}\mathit{y}\mathbf{-}\mathit{B}\mathit{e}\mathit{g}\mathit{i}\mathit{n}\mathit{n}\mathit{i}\mathit{n}\mathit{g}\mathit{I}\mathit{n}\mathit{e}\mathit{v}\mathit{n}\mathit{t}\mathit{o}\mathit{r}\mathit{y}\\ & \mathbf{=}& \mathbf{\$}\mathbf{36}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{\$}\mathbf{6}\mathbf{,}\mathbf{500}\mathbf{-}\mathbf{\$}\mathbf{8}\mathbf{,}\mathbf{000}\\ & \mathbf{=}& \mathbf{\$}\mathbf{34}\mathbf{,}\mathbf{500}\\ & & \end{array}$

Step 7: Missing Value (g)

$\begin{array}{c}\left(g\right)\mathbf{C}\mathbf{O}\mathbf{G}\mathbf{S}\mathbf{=}\mathbf{N}\mathbf{e}\mathbf{t}\mathbf{ }\mathbf{S}\mathbf{a}\mathbf{l}\mathbf{e}\mathbf{s}\mathbf{ }\mathbf{R}\mathbf{e}\mathbf{v}\mathbf{e}\mathbf{n}\mathbf{u}\mathbf{e}\mathbf{-}\mathbf{G}\mathbf{r}\mathbf{o}\mathbf{s}\mathbf{s}\mathbf{ }\mathbf{P}\mathbf{r}\mathbf{o}\mathbf{f}\mathbf{i}\mathbf{t}\\ \mathbf{=}\mathbf{\$}\mathbf{80}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{\$}\mathbf{44}\mathbf{,}\mathbf{000}\\ \mathbf{=}\mathbf{\$}\mathbf{36}\mathbf{,}\mathbf{000}\end{array}$