I am having trouble with two accounting questions and would appreciate any help/guidance anyone can provide.
The inventory account of Irick Company at December 31, 2010, included the following items:
Merchandise out on consignment at sales price $15,000
(including markup of 40% on selling price)
Goods purchased, in transit (FOB shipping point) 12,000
Goods held on consignment by Irick 13,000
Goods out on approval (sales price $7,600, cost $6,400) 7,600
Based on the above the Dec 31 inventory should be reduced by:
Miles Company, a wholesaler, budgeted the following sales for the indicated months:
June July August
Sales on account $1,800,000 $1,840,000 $1,900,000
Cash Sales 180,000 200,000 260,000
Total Sales $1,980,000 $2,040,000 $2,160,000
All merchandise is marked up to sell at its invoice cost plus 20%. Merchandise inventories at the beginning of each month are at 30% of the months projected cost of goods sold.
Merchandise purchased for July are anticipated to be
Thanks in advance and if you wouldn't mind explaining the answer so I can try and learn this stuff that would be great.