Reference no: EM132887519
On September 30, Stark Company needed to estimate its ending inventory in order to prepare its third-quarter financial statements. The following information is available:
(1) Inventory, July 1: $12,500
(2) Third quarter net sales: $40,000
(3) Third quarter net purchases: $17,500
Problem 1: Stark's gross profit ratio is 15%. Estimated cost of goods sold would be:
A. $6,000.
B. $34,000.
C. $36,000.
D. $40,000.
E. $57,500.
Problem 2: Patel Packing had the following information for its inventory:
Beginning inventory: cost $107,000; retail $130,000
Net purchases: cost $58,000; retail $120,000
Sales at retail: $145,000
What is the estimated cost of the ending inventory?
A. $44,188.
B. $57,102.
C. $57,750.
D. $69,300.
E. $105,000.
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