Wallace Company Provides the Following Data for Next Year

question 128

Multiple Choice

Wallace Company provides the following data for next year:

The gross profit rate is 35% of sales.Inventory at the end of December is $29,600 and target ending inventory levels are 10% of next month's sales,stated at cost.
What is the amount of purchases budgeted for January?

• A)$70,980
• B)$55,420
• C)$78,000
• D)$85,020

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Definitions:

Duty of Trust

An obligation that requires a party, typically in a fiduciary role, to act in the best interest of another party.

Confidentiality

The obligation to keep information shared in a privileged relationship secret, preventing unauthorized disclosure of private information.

Professional

An individual who has specialized skills, knowledge, and expertise in a particular field or occupation, typically acquired through education and training.

Generally Accepted Auditing Standards (GAAS)

The principles auditors must adhere to while conducting audits on companies' financial statements.