JT Department Store Expects to Generate the Following Sales for the Next

question 128

Multiple Choice

JT Department Store expects to generate the following sales for the next three months: JT's cost of gods sold is 60% of sales dollars.At the end of each month,JT wants a merchandise inventory balance equal to 20% of the following month's expected cost of goods sold.What dollar amount of merchandise inventory should JT plan to purchase in August?

• A)$257,400
• B)$314,600
• C)$352,800
• D)$327,800

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Definitions:

Inventory Method

The approach or system used by a company to track and manage inventory, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).

Notes

A financial document representing an agreement for a borrower to pay back a lender according to specified terms, often detailing the interest rate, repayment schedule, and maturity date.

Balance Sheet

A financial statement that displays a company's financial position at a certain date, showing assets, liabilities, and shareholders' equity.