On September 1 of the Current Year,Scots Company Experienced a Flood

question 97

Multiple Choice

On September 1 of the current year,Scots Company experienced a flood that destroyed the company's entire inventory.Because the company had not completed its month end reporting for August,it must estimate the amount of inventory lost using the gross profit method.At the beginning of August,the company reported beginning inventory of $215,450.Inventory purchased during August was $192,530.Sales for the month of August were $542,500.Assuming the company's typical gross profit ratio is 40%,estimate the amount of inventory destroyed in the flood.

• A)$87,480
• B)$134,520
• C)$109,980
• D)$82,480
• E)$81,480

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Definitions:

Stereotype

A widely held but fixed and oversimplified image or idea of a particular type of person or thing.

Ethnocentrism

The belief that one’s ethnic group is more normal than others; an emotional source of prejudice because of people’s gut-level feelings about how right their group is—and, in turn, how wrong they think other groups are.

Attitudes

Mental states or orientations that reflect the evaluations, feelings, and propensities toward aspects of our environment, such as people, objects, and ideas.

Institutional Prejudice

Prejudice that is caused by policies in the workplace that are not intentionally set to exclude members of specific groups or to treat them differently, but which have that effect anyway.