(Answered) Question - extravaganza costumes estimates its inventory by

Accounting

Question - Extravaganza Costumes estimates its inventory by the gross profit method. The gross profit has averaged 29% of net sales.

The company's inventory records reveals the following data (amounts in thousands)

Inventory, March 1 $293

Transaction during March:

Purchases 7767

Purchases discounts 167

Purchases returns 27

Sales 8642

Sales returns 32

Requirement 1 - Estimate the March 31 inventory, using the gross profit.

Requirement 2 - Prepare the March income statement through gross profit for Extravaganza Costumes.

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