On June 30 a Company Needed to Estimate Its Ending

question 68

Multiple Choice

On June 30 a company needed to estimate its ending inventory to prepare its second quarter financial statements. The following information is available: Beginning inventory, April 1: $6,000
Net sales: $70,000
Net purchases: $36,000
The company's gross margin ratio is 12%. Using the gross profit method, the cost of goods sold would be:

• A)$8,400
• B)$34,000
• C)$61,600
• D)$40,000
• E)$35,200

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Definitions:

Object Permanence

The realization that objects still exist even when they are not visible, audible, or detectable by any other senses.

Accommodation

In cognitive psychology, the process by which existing mental schemas are modified or new schemas are created to absorb new information.

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, pretending, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled, or sensed in any way).