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  3. 1) sunland co. prepares monthly income statements.

1) Sunland Co. prepares monthly income statements. Inventory is counted only at year end; thus,...

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Accounting

1) Sunland Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account. The rate of mark-up on cost is 25%. The following information relates to the month of May.

Accounts receivable, May 1 $22,500
Accounts receivable, May 31 12,000
Collections of accounts during May 81,500
Inventory, May 1 48,000
Purchases during May 62,500

Calculate the estimated cost of the inventory on May 31.

Estimated cost of the inventory

2) An inventory taken the morning after a large theft discloses $57,000 of goods on hand as of March 12. The following additional data is available from the books:

Inventory on hand, March 1 $86,000
Purchases received, March 1 - 11 63,500
Sales (goods delivered to customers) 105,000

Past records indicate that sales are made at 40% above cost. Estimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss.

Inventory of goods on hand $
Theft loss $

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