22 On January 1, 2020, the merchandise inventory of Fruit Tree Corp. was $600,000. During 2020, Fruit Free purchased $1,150,000 of merchandise and recorded sales of $1,350,000. The gross profit rate on these sales was 35%. What is the estimated dollar value of the inventory at December 31? Select one: a. $872,500 b. $562,500 c. $472,500 d. $877,500

22 On January 1, 2020, the merchandise inventory of Fruit Tree Corp. was $600,000. During 2020, Fruit Free purchased $1,150,000 of merchandise and recorded sales of $1,350,000. The gross profit rate on these sales was 35%. What is the estimated dollar value of the inventory at December 31? Select one: a. $872,500 b. $562,500 c. $472,500 d. $877,500

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 4MC

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GANDA Co. has a recent gross profit history of 40% of net sales. These data are taken from the records for the quarter ended March 31, 2020: Inventor -January 1 P650,000 PurchasesP3,200,000 Net sales P4,500,000 Purchase return P75,000 Freight in P50,000. What is the estimated cost of inventory on March 31, 2020? A. P1,120,000 B. P1,125,000 C. P2,025,000 D. P2,700,000 E. answer not given