Given answer general Accounting On January 1, 2016, Company X had an inventory balance of$200,000. During the year, Company X had net purchases of$1,000,000 and net sales of $900,000. Historically, Company X'sgross profit ratio has been 40%. Using the gross profit method, whatis Company X's estimated ending inventory balance?

Step 1: Calculate the Cost of Goods Available for Sale (COGAFS):• Formula: Cost of Goods Available…

Answered: On January 1, 2016, Company X had an…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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On January 1, 2016, Company X had an inventory balance of $200,000. During the year, Company X had net purchases of $1,000,000 and net sales of $900,000. Historically, Company X's gross profit ratio has been 40%. Using the gross profit method, what is Company X's estimated ending inventory balance?