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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