On January 31, a company needed to estimate its ending inventory to prepare its monthly financial statements. The following information is currently available: Inventory as of January 1: $120,500 Net sales for January: $400,000
Net purchases for January: $270,500
This company typically achieves a gross profit ratio of 15%. Ending Inventory under the gross profit method would be:
A) $9,000.
B) $51,000.
C) $10,425.
D) $102,425.
E) $51,425.

Question

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The Answer of On January 31, a company needed to estimate its ending inventory to prepare its monthly financial statements. The following information is currently available: Inventory as of January 1: $120,500 Net sales for January: $400,000
Net purchases for January: $270,500
This company typically achieves a gross profit ratio of 15%. Ending Inventory under the gross profit method would be:
A) $9,000.
B) $51,000.
C) $10,425.
D) $102,425.
E) $51,425.

On January 31, a Company Needed to Estimate Its Ending