A markup of 30% on cost is equivalent to what markup on selling price?

Net Sales (squeeze) 130%

COGS (constant) (100%)
MU on COST (given) 30%

30/130 x 100 = 23.08%

A company had a gross profit of 480,000, total purchases of 56,000, and an ending inventory of 320,000 in its first year
of operations as a retailer. The company’s sales in its first year must have bee.

Sales P720,000
*Less: COGS (240,000)
GROSS PROFIT 480,000

*COGS:
Total Purchases 560,000
Less: Ending inventory (320,000)
COGS 240,000

The following information is available for October for ABC Company:

Beginning inventory P 250,000
Net purchases 630,000
Net sales 980,000
Percentage mark-up on cost 65.00%

A fire destroyed ABC’s October 31 inventory, leaving undamaged inventory with a cost of P9,500 excluding goods caried
in consignment on behalf of BCD Inc. worth P4,000. Using the gross profit method, the estimated ending inventory
destroyed by fire is.

INVENTORY
Beginning P 250,000
Net purchases 630,000
P 593,939.39 *COGS
P 286,060.61

*COGS:
Net Sales P980,000
Multiply by: Cost Ratio (100/100+65) 60.61%
COST OF GOODS SOLD P 593,939.39

Inventory loss:
Ending inventory P286,060.61
Undamaged inventory (9,500)
INVENTORY LOSS DUE TO FIRE P 276,560.61
 BCD Company, a wholesaler, budgeted the following sales for the indicated months:
June July Aug
Credit Sales P 2,700,000 P 2,760,000 P 2,850,000
Cash Sales 270,000 300,000 390,000
Total Sales P 2,970,000 P 3,060,000 P 3,240,000

All merchandise is marked up to sell at its invoice cost plus 22%. Merchandise inventories at the beginning of each
month are at 30% of that month’s projected cost of goods sold.

The cost of goods sold for the month of June anticipated to be is?

MU on COGS (given) 22%

COGS:
Net sales P 2,970,000
Multiply by: Cost Ratio (100/100 + 22) 81.97%
COST OF GOODS SOLD P 2,434,426.23

Refer to previous problem: Merchandise purchases for July are anticipated to be

COGS:
Net sales P 3,060,000
Multiply by: Cost Ratio (100/100 + 22) 81.97%
COST OF GOODS SOLD P 2,508,196.72

INV. BEG:
Cost of goods sold P 2,508,196.72
Multiply by 30%
INVENTORY BEG. for JULY P 752,459.02

INVENTORY
Beginning P 752,459.72
Net purch. P 2,552,458.31
P 2,508,196.72 COGS
P 796.721.31 *Inv. end, July

*Inventory end, July

COGS:
Net sales P 3,240,000
Multiply by: Cost Ratio (100/100 + 22) 81.97%
COST OF GOODS SOLD AUGUST P 2,655,737.70

Cost of goods sold P 2,655,737.70

Multiply by 30%
INVENTORY BEG. for AUGUST P 796,721.31
 Given the following information of EFG Trading Corporation:
Beginning inventory P 57,000
Purchases year to date 186,000
Sales year-to-date 320,000
Historical gross margin percentage 35%
Cost-to-retail ratio 60%

Estimate the ending inventory & COGS using the gross margin method

INVENTORY
Beginning P 57,000
Purchases P 186,000
P 208,000 *COGS
P 35,000 Ending inventory

*COGS
Sales P 320,000
Multiply by: Cost Ratio (100-35) 65%
COGS P 208,000

Given the following information of EFG Trading Corporation:

Beginning inventory P 57,000
Purchases year to date 186,000
Sales year-to-date 320,000
Historical gross margin percentage 35%
Cost-to-retail ratio 60%

Estimate the ending inventory & COGS using the retail method-average

INVENTORY
Beginning P 57,000
Purchases P 186,000
P 192,000 *COGS
P 51,000 Ending inventory

*COGS – Step 1 – get the average cost ratio = TGAS at COST / TGAS at retail

Beg inv. P 57,000

Add: Purchases 186,000
TGAS AT COST P 243,000

TGAS at Cost P 243,000

Divided by: Cost-to-retail ratio 60%
TGAS AT RETAIL P 405,000

Average cost ratio

= P243,000 / P405,000
= 60%

*COGS – Step 2 – Compute

Sales P320,000
Multiply by: Cost Ratio 60%
COGS P 192,000