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Gross Profit and Retail Method

Total questions: 11

Worksheet time: 21mins

Name
Class
Date
1.

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?

a)

P26,000

b)

P30,000

c)

P28,000

d)

P32,000

2.

What is the cost of goods available for sale?

a)

28,000,000

b)

31,000,000

c)

33,000,000

d)

29,500,000

e)

30,500,000

3.

What is the cost of goods sold?

a)

21,900,000

b)

22,200,000

c)

21,300,000

d)

24,000,000

e)

1,200,000

4.

What is the estimated cost of inventory shortage?

a)

21,900,000

b)

22,200,000

c)

21,300,000

d)

24,000,000

e)

1,200,000

5.

What is the inventory on December 31, 2014?

a)

2,370,000

b)

2,025,000

c)

2,505,000

d)

2,730,000

6.

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

a)

1,680,000

b)

1,920,000

c)

2,400,000

d)

2,440,000

7.

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

a)

25 percent

b)

33 1/3 percent

c)

75 percent

d)

66 2/3 percent

8.

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

a)

2,400,000

b)

2,460,000

c)

3,060,000

d)

2,700,000

9.

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

a)

2,560,000

b)

2,624,000

c)

3,060,000

d)

3,264,000

e)

2,880,000

10.

What is the amount of goods manufactured at retail?

a)

1,400,000

b)

2,200,000

c)

2,000,000

d)

2,240,000

e)

2,880,000

11.

What is the cost of goods sold?

a)

500,000

b)

200,000

c)

840,000

d)

600,000