On January 31,a Company Needed to Estimate Its Ending Inventory

question 104

Multiple Choice

On January 31,a company needed to estimate its ending inventory to prepare its monthly financial statements.The following information is currently available: Inventory as of January 1: $120,500
Net sales for January: $400,000
Net purchases for January: $270,500
This company typically achieves a gross profit ratio of 15%.Ending Inventory under the gross profit method would be:

• A)$102,425.
• B)$10,425.
• C)$9,000.
• D)$51,000.
• E)$51,425.