On December 31, a Company Needed to Estimate Its Ending

question 146

Multiple Choice

On December 31, a company needed to estimate its ending inventory to prepare its fourth quarter financial statements. The following information is currently available: Inventory as of October 1: $12,500
Net sales for fourth quarter: $40,000
Net purchases for fourth quarter: $27,500
The company typically achieves a gross profit ratio of 15%. Ending Inventory under the gross profit method would be:

• A)$4,000
• B)$6,000
• C)$10,000
• D)$16,000
• E)$34,000

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Definitions:

Organization of Work

The arrangement and management of work tasks, workforce, and resources in an entity to maximize efficiency and achieve objectives.

American Society

Refers to the social structure, cultural norms, and values that characterize the United States of America and its inhabitants.

Scientific Revolution

The Scientific Revolution began in Europe about 1550. It encouraged the view that sound conclusions about the workings of society must be based on solid evidence, not just speculation.

Organizing Society

The ways in which social structures and institutions are arranged and managed to form a functioning community or society.