Otingo Equipment Co. wants to prepare interim financial statements for the first quarter. The company wishes to avoid making a physical count of inventory. Otingo’s gross profit rate averages 35%. The following information for the first quarter is available from its records.

January 1 beginning inventory$802,880Cost of goods purchased2,209,636Sales3,760,260Sales returns79,300\begin{array}{lr} \text{January 1 beginning inventory}&\$802,880\\ \text{Cost of goods purchased}&2,209,636\\ \text{Sales}&3,760,260\\ \text{Sales returns}&79,300\\ \end{array}

Required Use the gross profit method to estimate the company’s first quarter ending inventory.


Answered 1 year ago
Answered 1 year ago
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In this exercise, we are asked to compute the ending inventory of Otingo Equipment Co.

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