Accounting Changes for Customers and Inventory
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During 2005 Gross Profit was 180,000, COGS were 75% of Net Sales, Wage Expense was (1/9) of Net Sales, Wage Expense was (1/9) of COGS and these selected accounts changed as follows:
A/P increased $65,000
A/R decreased $35,000
Inventory increased $25,000
Wage Payable decreased $15,000
FYE 12/31/05 compute the amt of 1) Net Sales; 2) Wage Exp; 3) Cash Collected from Customers; 4) Cash pd for Inventory; 5) Cash pd for wages
Please help to compute.
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Solution Summary
The solution discusses the accounting changes for customers and inventory in the given problem.
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1) Gross Profit = Net Sales - COGS
As COGS is 75% of the Net sales we have
180,000 = Net Sales - 0.75*Net Sales=0.25*net sales
Net sales = 720,000
2) There is some confusion with the ...
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