For the Last Several Years Conway Corporation Has Operated with a Gross

question 52

Multiple Choice

For the last several years Conway Corporation has operated with a gross profit rate of 40%. On 1 January of the current year the company had on hand inventory with a cost of $600,000. Purchases of inventory during January amounted to $150,000, and sales for the month were $360,000. Using the gross profit method, what is the estimated inventory at 31 January?

• A) $144,000.
• B) $216,000.
• C) $360,000.
• D) $534,000.

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