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:

Merger Negotiations

The process of discussing and reaching an agreement on the terms of combining two or more companies into one entity.

SEC Rules

Regulations established by the U.S. Securities and Exchange Commission, which govern the securities industry and aim to protect investors, maintain fair, orderly, and efficient markets.

Disclosure

The action of making known something that was previously secret or private, often required by law in financial and legal transactions.

Regulation A

An exemption under the Securities Act, allowing smaller companies to raise capital through securities offerings with reduced regulatory requirements compared to traditional public offerings.