For the year, your company's sales are $305,000, the gross profit is $250,000, and the ending inventory is $75,000. If net purchases are $100,000, the beginning inventory must have been: a. $30,000 b. $55,000 c. $85,000 d. $120,000

For the year, your company's sales are $305,000, the gross profit is $250,000, and the ending inventory is $75,000. If net purchases are $100,000, the beginning inventory must have been: a. $30,000 b. $55,000 c. $85,000 d. $120,000

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

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 8P: Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning...

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Question

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For the year, your company's sales are $305,000,
the gross profit is $250,000, and the ending
inventory is $75,000. If net purchases are
$100,000, the beginning inventory must have
been:
a. $30,000
b. $55,000
c. $85,000
d. $120,000

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Comprehensive The following information for 2019 is available for Marino Company: 1. The beginning inventory is 100,000. 2. Purchases returns of 4,000 were made. 3. Purchases of 300,000 were made on terms of 2/10, n/30. Eighty percent of the discounts were taken. 4. At December 31, purchases of 20,000 were in transit, FOB destination, on terms of 2/10, n/30. 5. The company made sales of 640,000. The gross selling price per unit is twice the net cost of each unit sold. 6. Sales allowances of 6,000 were made. 7. The company uses the LIFO periodic method and the gross method for purchase discounts. Required: 1. Compute the cost of the ending inventory before the physical inventory is taken. 2. Compute the amount of the cost of goods sold that came from the purchases of the period and the amount that came from the beginning inventory.
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