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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Definitions:

Loanable Funds

The money available in the banking system for lending to businesses or consumers, influenced by interest rates and monetary policy.

Demand for Loanable Funds

The Demand for Loanable Funds represents the relationship between the interest rate and the total amount of loans that borrowers are willing to take at that rate.

Technological Advance

The introduction of new technologies or the improvement of existing ones, enhancing productivity and efficiency.

Economic Expansion

A phase of the business cycle where there is an increase in economic activity, marked by rising GDP, employment, and income levels.