1- Boston Company sells tenten items for$1,400 per? unit, and has a cost of good
ID: 2431305 • Letter: 1
Question
1- Boston Company sells tenten items for$1,400 per? unit, and has a cost of goods sold percentage of 60?%.The gross profit to be reported for selling10 items? is:
A.
$ 14,000.
B.
$8,400.
C.
$5,600.
D.
$ $560.
2- The following data are for? Steve's Candy Store for? January:
Beginning inventory
$221,000
Net sales revenue
$590,000
Net purchases
510,000
Normal gross profit rate
30?%
What is the? company's estimated ending inventory for the? month?
A.
$318,000.
B.
$177,000.
C.
$554,000.
D.
$413,000
Beginning inventory
$221,000
Net sales revenue
$590,000
Net purchases
510,000
Normal gross profit rate
30?%
Explanation / Answer
1. C. $5,600
Gross profit = ($1,400 * 10) * 40% = $14,000 * 40% = $5,600
2. A. $318,000
Cost of Goods available for sale = Beginning inventory + Purchases = $221,000 + $510,000 = $731,000
Ending inventory = Cost of Goods available for sale - Cost of goods sold = $731,000 - (70% × $590,000) = $318,000
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