Blue Company on January 1, Had Inventory Costing $65,000; During

question 84

Short Answer

Blue Company on January 1, had inventory costing $65,000; during January net purchases were $119,000. Over recent years, Blue's gross profit has averaged 40% on sales. Assuming that the company has net sales of $190,000, calculate the estimated cost of ending inventory by using the gross profit method.

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Definitions:

Federal Unemployment Tax

A United States federal tax imposed on employers to fund state workforce agencies. Employers pay this tax to the Internal Revenue Service (IRS) to cover the costs of unemployment compensation to workers who have lost their jobs.

Wage And Tax Statement

A document, often referred to as a W-2 form, issued by employers to employees detailing the employee's wages and taxes withheld during the year.

Voluntary Deductions

Employee-elected deductions from their payroll for benefits, contributions, or savings plans.

Salaries And Wages Payable

A liability account that records the amounts owed to employees for work performed that has not yet been paid.