TB Nelson Company Prepares Monthly Financial Statements and Uses the Gross

question 24

Multiple Choice

TB Nelson 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 $180,000; the beginning inventory on June 1 was $54,000; and the cost of goods purchased during June amounted to $90,000.The estimated cost of TB Nelson Company's inventory on June 30 is

• A)$21,600.
• B)$36,000.
• C)$72,000.
• D)$126,000.

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Definitions:

Conscious Awareness

The state of being cognitively awake and aware of one's internal and external environments.

Memories

The faculty by which the mind stores and remembers information; also refers to the mental record of past experiences.

Reality Principle

A concept in psychoanalytic theory representing the ability of the mind to assess the external world and act upon it accordingly, as opposed to the pleasure principle.

Ego

In psychoanalytic theory, the part of the personality that deals with the reality of the world and tries to meet the needs of the id in socially acceptable ways.