Greenfield Supplies has operated with a 35% average gross profit ratio for several years. During the second quarter of this year, the company reported $130,000 in sales. It began the quarter with $22,500 of inventory at cost and purchased $85,000 of inventory during the quarter. Using the gross profit method, what is the estimated ending inventory for Greenfield Supplies?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
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Greenfield Supplies has operated with a 35% average gross
profit ratio for several years. During the second quarter of
this year, the company reported $130,000 in sales. It began the
quarter with $22,500 of inventory at cost and purchased
$85,000 of inventory during the quarter.
Using the gross profit method, what is the estimated ending
inventory for Greenfield Supplies?
Transcribed Image Text:Greenfield Supplies has operated with a 35% average gross profit ratio for several years. During the second quarter of this year, the company reported $130,000 in sales. It began the quarter with $22,500 of inventory at cost and purchased $85,000 of inventory during the quarter. Using the gross profit method, what is the estimated ending inventory for Greenfield Supplies?
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