Prepare the may income statement through gross profit

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Reference no: EM13527388

Estimating ending inventory by the gross profit method and preparing the income statement

Halloween Costumes estimates its inventory by the gross profit method. The gross profit has averaged 30% of net sales. The company's inventory records reveal the following data:

Inventory, May 1

$ 270,000

Transactions during May:


Purchases

7,520,000

Purchase discounts

146,000

Purchase returns

37,000

Sales

8,719,000

Sales returns

27,000

Requirements

1. Estimate the May 31 inventory, using the gross profit method.

2. Prepare the May income statement through gross profit for Halloween Costumes.

Reference no: EM13527388

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