PROBLEM #3

1. LOUD CO.

Sales 454,000 Based on Sales

Sales return -2,000 Beginning Inventory 80,000

Net Sales 452,000 Purchases 340,000

Cost Ratio (100% - 25%) 75% Purchase discount -4,000
Cost of sales 339,000 Freight in  12,000
TGAS 428,000

Sales 454,000 Cost of Sales -339,000

Sales return -2,000 Ending Inventory 89,000

Net Sales 452,000

Divided by 125%) 125%
Cost of sales 361,600

2. BANDOLIN CO.

Inventory, January 1  162,000

Purchases  3,324,000
Purchases returns and discounts -16,000

Freight in  104,000

Total Goods Available for Sale 3,574,000
Cost of Goods Sold -3,018,600
Inventory, November 30  555,400
Less: On-hand inventories -443,000
In-transit inventories -56,000
Loss due to theft 56,400

3. NORTHSALESTAR SALES CORP.

Inventory, January 1  -
Purhcases 860,000
Purchases returns and allowances  -46,120
Total Goods Available for Sale  813,880

Less: Ending Inventory* -173,120

Cost of Goods Sold  640,760

Net Sales (788,000 - 16,000) 772,000 100%

Cost of Goods Sold  640,760 83%
Gross Profit 131,250 17%

Inventory, January 1  173,120

Purchases  692,000
Purchases returns and allowances -64,600

Total Goods Available for Sale 800,520

Cost of Goods Sold -652,800
Inventory, December 31 147,720
Less: cost of undamaged -19,200
inventories (24,000*80%)
Less: NRV of damaged -3,600
inventories
Loss due to fire 124,920

4.REE REE Co.

Disbursement for purchases 80,000

ADD: Increase in A/P 10,000
Actual purchases 90,000
ADD: Decrease in inventory -30,000
Cost of good sold 120,000

5. Afternoon Co.
6. HOLDAWAY Co.

7. MANUALS CORP.

Cost Retail
Beginning Inventory 45,000 75,000
Purchases 270,000 590,000
Freight in 6,750
Net mark ups 50,000
Net mark downs -20,000
Goods available for sale 321,750 695,000
Gross sales -640,000
Sales returns 40,000
Normal shrinkage -12,000
Ending inventory at retail 83,000

Ending inventory at retail 83,000

x Cost ratio 46.29%

Ending inventory at cost 38,420.70
Beginning Inventory 45,000
Purchases 270,000
Freight in 6,750
Ending inventory at cost -38,420.70
Cost of goods sold 283,329.30

Ending inventory at retail 83,000

x Cost ratio 44.64%

Ending inventory at cost 37,051.20
Beginning Inventory 45,000
Purchases 270,000
Freight in 6,750
Ending inventory at cost -37,051.20
Cost of goods sold 284,698.80

8. Thursday co.

Cost Retail
Beginning Inventory 20,000 28,000
Purchases 110,600 160,600
Freight in 4,000
Purchase discounts -1,000
Purchase returns -10,400 -17,200
Departmental transfer in 2,000 3,000
Departmental transfer out -1,600 -2,400
Abnormal losses -10,000 -14,000
Mark ups 12,000
Mark up cancelation -4,000
Mark downs -24,000
Mark down cancelation 6,000
Goods available for sale 113,600 148,000
Gross sales -87,600
Sales returns 5,000
Employee discounts -1,000
Normal spoilage -400
Ending inventory at retail 64,000

Ending inventory at retail 64,000

x Cost ratio 76.76%

Ending inventory at cost 49,126.40

Beginning Inventory 20,000

Purchases 110,600
Freight in 4,000
Purchase discounts -1,000
Purchase returns -10,400
Departmental transfer in 2,000
Departmental transfer out -1,600

Abnormal losses -10,000

Ending inventory at cost -49,126.40
Cost of goods sold 64,473.60

10. NUISANCE Co.

Sales 454,000
Less: sales return -2,000
ADD: ending inventory 78,000
Total in Sales 530,000

Inventory Beg. 36,000

ADD: Purchases 320,000
Freight In 18,000
LESS: Purchase discount -3,000
Total Inventory at cost 371,000

Ratio of cost of sales

371,000 / 530,000 = 70%

Ending Inventory at cost

78,000 X 70% = 54,600
Based on Cost
80,000

340,000
-4,000
12,000
428,000
-361,600
66,400