Ernst Equipment Co. wants to prepare interim financial statements for the first quarter. The company?

Question

The company
wishes to avoid making a physical count of inventory. Ernst’s gross profit rate averages 30%. The
following information for the first quarter is available from its records:
January 1 beginning inventory . . . . . . . $ 752,880
Cost of goods purchased . . . . . . . . . . . 2,159,630
Sales . . . . . . . . . . . . . . . . . . . . . . . . . 3,710,250
Sales returns . . . . . . . . . . . . . . . . . . . . 74,200
January 1 beginning inventory . . . . . . . $ 0
Cost of goods sold . . . . . . . . . . . . . . . 14,052
March 31 ending inventory . . . . . . . . . 704
Check Estim.
Use the gross profit method to estimate the company’s first quarter ending inventory

Answer 1

Would you like to check your question again? You have 2 beginning inventory at Jan. 1. I think you've merged 2 exercises together.

January 1 beginning inventory . . . . . . . $ 752,880
January 1 beginning inventory . . . . . . . $ 0