Essay About Gross Profit Method And Gross Profit Of Sales

Proctor & Gamble Company
AC 550
Project 2
Part 1 Gross Profit Method
Gross Profit of Sales
Beginning Inventory (at cost) $100,000
Net Purchases (at cost) 400,000
Goods available at cost 500,000
Sales $400,000
Less: Gross profit (25% of 400,000) 100,000
Sales (at cost) 300,000
Approximate inventory at cost $200,000
Gross Profit of Cost of Goods Sold
Beginning Inventory (at cost) $100,000
Net Purchases (at cost) 400,000
Goods available at cost 500,000
Sales $400,000
Less: Gross profit (33.3% of 400,000) 133,000
Sales (at cost) 267,000
Approximate inventory at cost $233,000