On January 31, a Company Needed to Estimate Its Ending

question 111

Multiple Choice

On January 31, a company needed to estimate its ending inventory to prepare its monthly financial statements. The following information is currently available: Inventory as of January 1: $120,500 Net sales for January: $400,000
Net purchases for January: $270,500
This company typically achieves a gross profit ratio of 15%. Ending Inventory under the gross profit method would be:

• A) $9,000.
• B) $51,000.
• C) $10,425.
• D) $102,425.
• E) $51,425.

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