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Estimating Ending Inventory Chapter 6 Section 3. ESTIMATED MERCHANDISE INVENTORY SHEET OPEN TEXTBOOKS PAGE 183 OPEN WORKBOOKS PAGE 255.

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Presentation on theme: "Estimating Ending Inventory Chapter 6 Section 3. ESTIMATED MERCHANDISE INVENTORY SHEET OPEN TEXTBOOKS PAGE 183 OPEN WORKBOOKS PAGE 255."— Presentation transcript:

1 Estimating Ending Inventory Chapter 6 Section 3

2 ESTIMATED MERCHANDISE INVENTORY SHEET OPEN TEXTBOOKS PAGE 183 OPEN WORKBOOKS PAGE 255

3 ESTIMATED MERCHANDISE INVENTORY SHEET Gross Profit Method Handy Harware4/30/05 124,850.00 73,230.00 198,080.00 138,500.00 51,245.00 87,255.00 110,825.00 From General Ledger Purchases Minus Purchases Returns and Allowances Minus Purchases Discount Equals Net Purchases to Date Beginning Inventory + Net Purchases to Date From General Ledger Sales Minus Sales Returns and Allowances Minus Sales Discount Equals Net Sales to Date Line 4 X 37% Net Sales to Date – Estimated Gross Profit Merchandise Available for Sale – Estimated Cost of Merchandise Sold

4 ESTIMATED MERCHANDISE INVENTORY SHEET Retail Method Work Together 6-3 Handy Hardware 04/30/05 124,850.00 73,230.00 198,080.00 107,736.48 65.2 138,500.00 165,240.00 193,400.00 110,340.00 303,740.00 Merch avail. for sale at COST/ Merch avail for sale at RETAIL

5 ESTIMATED MERCHANDISE INVENTORY SHEET Complete OYO 6-3 completely and then check answers against computer. Correct errors then turn in

6 ESTIMATED MERCHANDISE INVENTORY SHEET Gross Profit Method Handy Harware 4/30/05 182,570.00 115,440.00 298,010.00 204,340.00 75,205.80 128,734.20 169,275.80

7 ESTIMATED MERCHANDISE INVENTORY SHEET Retail Method OYO 6-3 Handy Hardware 10/31/05 182,570.00 115,440.00 298,010.00 167,647.26 63.8 204,340.00 262,770.00 276,380.00 190,730.00 467,110.00 Merch avail. for sale at COST/ Merch avail for sale at RETAIL

8 Merchandise Inventory Turnover Ratio 168,365.00 170,845.00 5.4 times 173,325.00 925,368.00 January 1 Merchandise Inventory Cost of Merchandise Sold + Merchandise Inventory Turnover Ratio December 31 Merchandise Inventory ÷ 2 = Average Merchandise Inventory ÷ Average Merchandise Inventory = 170,845.00

9 Average Number of Days’ Sales in Merchandise Inventory 365 68 days5.4 times Days in a Year Merchandise Inventory Turnover Ratio ÷= Average Number of Days’ Sales in Merchandise Inventory

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