On March 31 a company needed to estimate its ending Inventor

On March 31 a company needed to estimate its ending Inventory to prepare its first quarter financial statements. The following Information is avallable: Beginning Inventory, January 1: $6,000 Net sales: $89,000 Net purchases: $87,000 The companys gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be Multiple Choice $66750 ? Pre 9 of 25 Ell Next > 3 8 0

Solution

Answer1:

Computing the closing stock:

Closing Stock = Gross profit + Purchases + opening stock - sales

= 25% * $89,000+ $87,000 +$6,000 - $89,000

= $26,250

Hence, the ending inventory would be $26,250

Note: According to the rules of Chegg, only First answer is need to give as compulsion question, hence only first main part has been answered.