The Starling Company uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. The average gross profit rate is 30% of sales. The following data relate to the month of July: • Inventory cost, July 1: $25,000 Purchases during the month at cost: $65,000 Sales: $85,000 Sales returns: $2,500 Using the data above, what is the estimated ending inventory on July 31? A. $19,500 B. $25,000 C. $33,500 D. $40,500

The Starling Company uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. The average gross profit rate is 30% of sales. The following data relate to the month of July: • Inventory cost, July 1: $25,000 Purchases during the month at cost: $65,000 Sales: $85,000 Sales returns: $2,500 Using the data above, what is the estimated ending inventory on July 31? A. $19,500 B. $25,000 C. $33,500 D. $40,500

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

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 2RE: On January 1, Pope Enterprises inventory was 625,000. Pope made 950,000 of net purchases during the...

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