needed statements The following information is currently ava

needed statements. The following information is currently available: Inventory as of J Net sales for the year: $400,000 Net purchases for the year: $270,500 of 15%, what would be the value balance of ending This company typically achieves a gross profit ratio Inventory under the gross profit method? T T T Anal3(12

Solution

Solution :- Gross profit ratio = Gross profit / Net Sales.

0.15 = Gross profit / 400000

Gross profit = 400000 * 0.15

Gross profit = $ 60,000.

Cost of goods sold = Net Sales - Gross profit.

= 400000 - 60000

= $ 340,000.

Cost of goods sold = Beginning inventory balance as on January 1 + Net purchases - Ending inventory balance as on December 31.

340000 = 120500 + 270500 - Ending inventory balance as on December 31.

Ending inventory balance as on December 31 = 391000 - 340000

Ending inventory balance as on December 31 = $ 51000.

Conclusion :- Value of ending inventory balance as on December 31 = $ 51000.