Question

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4200 Net sales: $42,000 Net purchases: $43,000 The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:

Name: on march 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements the following information is available beginning inventory january 1 4200 net 20815
Uploaded: 2022-05-15T19:31:29-08:00
Duration: 3 min 2 s
Channel: Rahul Mahato
Description: on march 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements the following information is available beginning inventory january 1 4200 net 20815

          On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4200 Net sales: $42,000 Net purchases: $43,000 The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:

Added by Victor M.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Rahul Mahato

05/15/2022

Step 1

The gross margin ratio is given as 15%, which means that 15% of net sales is the gross profit. \[ \text{Gross Profit} = \text{Net Sales} \times \text{Gross Margin Ratio} = 42,000 \times 0.15 = 6,300 \] Show more…

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On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4200 Net sales: $42,000 Net purchases: $43,000 The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be: