If the estimated rate of gross profit is 30%, what is the estimated cost of the...
If the estimated rate of gross profit is 30%, what is the estimated cost of the inventory on September 30, based on the following data?
| Sep. 01 | Inventory | $81,214.00 |
| Sep. 01-30 | Purchases (net) | $163,823.00 |
| Sep. 01-30 | Sales (net) | $121,760.00 |
Select the correct answer.
$36,528.00
$85,232.00
$159,805.00
$49,146.90
Homework Answers
Gross profit rate = 30%
Sales = $121,760
Gross profit = Sales x Gross profit rate
= 121,760 x 30%
= $36,528
Cost of goods sold = Sales - Gross profit
= 121,760 - 36,528
= $85,232
Cost of goods sold = Beginning inventory + Purchases - Ending inventory
85,232 = 81,214 + 163,823 - Ending inventory
Ending inventory = $159,805
estimated cost of the inventory on September 30 = $159,805
Third option is the correct option.
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