Pet Emporium had a robbery on the weekend in which a large amount of inventory was taken. The loss is covered completely by insurance. A physical inventory count determined that the cost of the remaining merchandise is $58,700. The following additional information is available:
 

  At Cost   At Retail   Beginning merchandise inventory $ 75,200   $ 93,950   Purchase returns and allowances   15,200     20,200   Purchases   1,311,670     1,732,250   Transportation-in   18,950         Sales         1,644,500   Sales returns and allowances         18,200  

Required:
1. Prepare an estimate of ending merchandise inventory using the retail method.

Select the correct answer.

Given the following information, prepare in good form the costof goods sold section of an income statement for 20x5.

ANS:

Prepare an Income Statement from the following information:

Sales $500,000

Sales Discount $650

Sales Return as Allowance $3,000

Beginning Merchandise Inventory $85,000

Purchases $265,000 Transport In $4,200

Purchase Discount $1,500

Purchase Return Allowance $1,700

Closing Merchandise Inventory $76,000

Advertisement Expenses $4,500

Insurance Expenses $1,500

Bank and Fees $1,200

Maintenance Expenses $3,200

Payroll Tax Expenses $7,600

Rent Expenses $12,000

Salaries Expenses $36,000

Supplies Expenses $3,200

Utilities Expenses $1,700

Federal Corporation IncomeTax Expenses $ 1,200