On March 31 a Company Needed to Estimate Its Ending

question 66

Multiple Choice

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4,000 Net sales: $80,000
Net purchases: $78,000
The company's gross margin ratio is 25%.
-Using the gross profit method, the cost of goods sold would be:

• A) $19,500.
• B) $63,000.
• C) $60,000.
• D) $58,500.
• E) $20,000.

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Definitions:

Simple Interest

Interest calculated only on the initial amount of money (principal), without compounding over time.

Bonds

Financial instruments representing loans made by an investor to a borrower, typically corporate or governmental, which must be paid back with interest.

Positive Integers

Whole numbers greater than zero, found to the right of zero on the number line.

Difference

The result of subtracting one number from another to show the gap or distance between them.