The beginning inventory of Soft Toys Inc.was $46,000.The purchases (excluding returns)and sales revenue for the year were $230,000 and $325,000,respectively.The purchase returns amounted to $30,000.The company's normal gross profit percent is 60%.What is the amount of the estimated ending inventory?

Question

Quizplus · Accepted Answer

First, we need to calculate the cost of goods sold (COGS):

Beginning Inventory = $46,000
Purchase (excluding returns) = $230,000
Purchase Returns = $30,000
Net Purchases = $200,000 ($230,000 - $30,000)
Cost of Goods Available for Sale = $246,000 ($46,000 + $200,000)
COGS = $98,400 ($246,000 x 40%)

Next, we can calculate the estimated ending inventory:

Cost of Goods Available for Sale = $246,000
COGS = $98,400
Estimated Ending Inventory = $147,600 ($246,000 - $98,400)

Therefore, the correct answer is D, which is $116,000.

The Beginning Inventory of Soft Toys Inc