Reference no: EM132814214
PROBLEM - Jenkins Company reported the following information for the current year:
Beginning inventory 5,000,000
Purchases 26,000,000
Freight-in 2,000,000
Purchases returns and allowances 3,500,000
Purchase discounts 1,500,000
Sales 40,000,000
Sales returns 3,000,000
Sales allowances 500,000
Sales discounts 1,000,000
A physical inventory taken at year-end resulted in an inventory costing P4,000,000. At year- end, unsold goods out on consignment with selling price of P1,000,000 are in the hands of consignee. The gross profit was 40% on sales.
Required -
1. What is the cost of goods available for sale?
2. What is the cost of goods cold?
Important note: In the computation of net sales, sales disc. & sales allowances are ignored.
3. What is the estimated cost of inventory shortage?