The Beginning Inventory of Soft Toys Company Was $46,000

question 35

Multiple Choice

The beginning inventory of Soft Toys Company was $46,000. The purchases (excluding returns) and sales revenue for the year were $230,000 and $325,000, respectively. The purchase returns amounted to $30,000. The company's normal gross profit percent is 60%. What is the amount of estimated ending inventory?

• A)$72,000
• B)$246,000
• C)$30,000
• D)$116,000

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Definitions:

Administrative Expenses

Overheads and general expenses related to the day-to-day management and operation of a business, excluding production and direct costs.

Operating Income

The profit realized from a business's core operations, excluding revenue from investments and costs such as interest expenses and taxes.

Cost Of Goods Sold

The specific costs tied to the production of goods sold by a company, which include the cost of materials and labor.

Merchandising Company Income Statement

An income statement format used by companies that buy and sell goods, highlighting the cost of goods sold and gross profit.