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QUESTION: 67 AT THE BEGINNING OF 2015, ENGLAND DRESSES HAS AN INVENTORY OF $85,000. HOWEVER, MANAGEMENT WANTS TO REDUCE THE AMOUNT OF INVENTORY ON HAND TO $45,000 AT DECEMBER 31. IF NET SALES FOR 2015 ARE FORECAST AT $200,000 AND THE GROSS PROFIT RATE IS EXPECTED TO BE 20%, COMPUTE THE COST OF THE MERCHANDISE WHICH MANAGEMENT SHOULD EXPECT TO PURCHASE DURING 2015.

QUESTION: 67 AT THE BEGINNING OF 2015, ENGLAND DRESSES HAS AN INVENTORY OF $85,000. HOWEVER, MANAGEMENT WANTS TO REDUCE THE AMOUNT OF INVENTORY ON HAND TO $45,000 AT DECEMBER 31. IF NET SALES FOR 2015 ARE FORECAST AT $200,000 AND THE GROSS PROFIT RATE IS EXPECTED TO BE 20%, COMPUTE THE COST OF THE MERCHANDISE WHICH MANAGEMENT SHOULD EXPECT TO PURCHASE DURING 2015.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION: 67 AT THE BEGINNING OF 2015, ENGLAND DRESSES HAS AN INVENTORY OF $85,000. HOWEVER, MANAGEMENT WANTS TO REDUCE THE AMOUNT OF INVENTORY ON HAND TO $45,000 AT DECEMBER 31. IF NET SALES FOR 2015 ARE FORECAST AT $200,000 AND THE GROSS PROFIT RATE IS EXPECTED TO BE 20%, COMPUTE THE COST OF THE MERCHANDISE WHICH MANAGEMENT SHOULD EXPECT TO PURCHASE DURING 2015.
Transcribed Image Text:QUESTION: 67 AT THE BEGINNING OF 2015, ENGLAND DRESSES HAS AN INVENTORY OF $85,000. HOWEVER, MANAGEMENT WANTS TO REDUCE THE AMOUNT OF INVENTORY ON HAND TO $45,000 AT DECEMBER 31. IF NET SALES FOR 2015 ARE FORECAST AT $200,000 AND THE GROSS PROFIT RATE IS EXPECTED TO BE 20%, COMPUTE THE COST OF THE MERCHANDISE WHICH MANAGEMENT SHOULD EXPECT TO PURCHASE DURING 2015.
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