Wade Company Prepares Monthly Financial Statements and Uses the Gross

question 250

Multiple Choice

Wade Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $80,000; the beginning inventory on June 1 was $24,000; and the cost of goods purchased during June amounted to $36,000. The estimated cost of Wade Company's inventory on June 30 is

• A) $12,000.
• B) $48,000.
• C) $20,000.
• D) $32,000.

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Definitions:

1-Hexyne

A colorless, flammable liquid hydrocarbon with a triple bond in its structure, part of the alkyne group, used in organic synthesis.

Condensed Structural Formula

A method of describing the elements or molecules that comprise a compound and the way in which they are bonded to each other, using lines for bonds and showing minimal detail.

Triple Bond

A type of chemical linkage where two atoms share three pairs of electrons, resulting in a bond that is shorter and stronger than those involving only one or two pairs of electrons.

2-Hexyne

An organic compound with the chemical formula C6H10, consisting of a six-carbon chain with a triple bond between the second and third carbon atoms.