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

question 32

Multiple Choice

For the last several years Conway Corporation has operated with a gross profit rate of 40%.On January 1 of the current year,the company had on hand inventory with a cost of $600,000.Purchases of merchandise 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 January 31?

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

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Definitions:

Raw Materials Transactions

Raw materials transactions involve the recording and tracking of purchases, usage, and inventory levels of raw materials in a manufacturing or production process.

November

The month that comes after October and before December in the Gregorian calendar, known as the eleventh month.

Manufacturing Overhead Costs

Expenses related to the manufacturing process that are not directly tied to the production of individual items, such as factory rent, utilities, and salaries of maintenance staff.

Journal Entry

A record in accounting that notes the specifics of a financial transaction, including date, amounts, and affected accounts, ensuring the accuracy of financial statements.