A Company Has Cost of Goods Available for Sale of $250,000,sales

question 124

Multiple Choice

A company has cost of goods available for sale of $250,000,sales of $305,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

• A)$95,000
• B)$50,000
• C)$36,500
• D)$158,500

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Definitions:

Preceding Year

The year immediately before the current year.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, calculated as cost of goods sold divided by the average inventory.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales, calculated by dividing net credit sales by the average accounts receivable.

Sales In Receivables

Likely refers to the concept of "Accounts Receivables" which are amounts owed by customers for goods or services delivered on credit.