Hamil Company Prepares Monthly Financial Statements and Uses the Gross

question 152

Multiple Choice

Hamil Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit margin. During June, net sales amounted to $50,000; the beginning inventory on June 1 was $15,000; and the cost of goods purchased during June amounted to $25,000. The estimated cost of Hamil Company's inventory on June 30 is

• A) $10,000.
• B) $30,000.
• C) $9,000.
• D) $20,000.

---

Definitions:

Location

The geographical place or position of something.

Raw Materials

Basic materials or substances used in the production or manufacturing of goods.

Finished Products

Items or goods that have completed the manufacturing or production process and are ready for sale or distribution.

Exchange Process

Activity in which two or more parties give something of value to each other to satisfy perceived needs.