A Company That Has Operated with a 30% Average Gross

question 72

Multiple Choice

A company that has operated with a 30% average gross profit ratio for a number of years had $100,000 in sales during the first quarter of this year. If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

• A) $30,000.
• B) $21,000.
• C) $20,000.
• D) $18,000.
• E) $27,000.

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Definitions:

Olfactory

Pertaining to the sense of smell.

Visual

Relating to seeing or to the perception of things by the sense of sight.

Tactile

Relating to the sense of touch or the sensation caused by objects coming into contact with the skin.

Neuromuscular Junction

The specialized synapse between a motor neuron and a muscle fiber, where neural signals are converted into muscular action.