On March 31 a Company Needed to Estimate Its Ending

question 96

Multiple Choice

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements.The following information is available: Beginning inventory,January 1: $4,000
Net sales: $80,000
Net purchases: $78,000
The company's gross margin ratio is 25%.Using the gross profit method,the cost of goods sold would be:

• A)$60,000.
• B)$20,000.
• C)$58,500.
• D)$63,000.
• E)$19,500.

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Definitions:

Accounting Information

Financial data and records relating to a company's operations, transactions, and financial status.

Users

Individuals or entities that utilize or interact with a system, product, or service.

Statement of Cash Flows

A financial report that shows how changes in balance sheet and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Activities Reported

A summary or record of actions, events, or operations that have taken place within a specific period.