A company has cost of goods available for sale of $250,000,sales of $305,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

Question

Quizplus · Accepted Answer

Using the Gross Profit Method,

1. Calculate Cost of Goods Sold:

Sales * (100% - Gross Profit Percentage) = Cost of Goods Sold 
$305,000 * (100% - 30%) = $213,500

2. Calculate Ending Inventory:

Cost of Goods Available for Sale - Cost of Goods Sold = Ending Inventory 
$250,000 - $213,500 = $36,500

Therefore, the ending inventory is $36,500, which corresponds to choice C.

A Company Has Cost of Goods Available for Sale of $250,000,sales