Gross Profit and Retail Method

Difficult. On Dec. 31, a physical inventory revealed that the ending inventory was only P100,000. IVE’s gross profit on net sales has remained constant at 40% in recent years. The company suspects that some inventory may have been stolen. At Dec. 31, how much is the estimated missing inventory?

• P26,000

• P30,000

• P28,000

• P32,000

What is the cost of goods available for sale?

• 28,000,000

• 31,000,000

• 33,000,000

• 29,500,000

• 30,500,000

What is the cost of goods sold?

• 21,900,000

• 22,200,000

• 21,300,000

• 24,000,000

• 1,200,000

What is the estimated cost of inventory shortage?

• 21,900,000

• 22,200,000

• 21,300,000

• 24,000,000

• 1,200,000

What is the inventory on December 31, 2014?

• 2,370,000

• 2,025,000

• 2,505,000

• 2,730,000

The gross margin is 40% of sales. What is the cost of goods available for sale?

• 1,680,000

• 1,920,000

• 2,400,000

• 2,440,000

What is the gross profit rate on cost for the current year?

• 25 percent

• 33 1/3 percent

• 75 percent

• 66 2/3 percent

What is the estimated cost of ending inventory using the conservative approach?

• 2,400,000

• 2,460,000

• 3,060,000

• 2,700,000

What is estimated cost of ending inventory using the average cost approach?

• 2,560,000

• 2,624,000

• 3,060,000

• 3,264,000

• 2,880,000

What is the amount of goods manufactured at retail?

• 1,400,000

• 2,200,000

• 2,000,000

• 2,240,000

• 2,880,000