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Question: Wayman Company wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Wayman's gross profit rate averages 35%. The following information for the first quarter is available from its records.
January 1 beginning inventory . . . . . . . . . $ 300,260
Cost of goods purchased . . . . . . . . . . . . 939,050
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,191,150
Sales returns . . . . . . . . . . . . . . . . . . . . . . 9,450
Required Use the gross profit method to estimate the company's first quarter ending inventory.
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