A Company That Has Operated with a 30% Average Gross

question 124

Multiple Choice

A company that has operated with a 30% average gross profit ratio for a number of years had $100,000 in sales during the first quarter of this year.If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter,its estimated ending inventory using the gross profit method is:

• A)$30,000
• B)$21,000
• C)$20,000
• D)$18,000
• E)$27,000