Question

Your answer is partially correct. Try again. Presented below is information related to Tamarisk Corporation for the current year Beginning inventory $590,300 Purchases 1,472,500 Total goods available for sale Sales revenue $2,062,800 2,455,000 Compute the ending inventory, assuming that (a) gross profit is 46% of sales, (b) gross profit is 60% of cost, (c) gross profit is 36 % of sales, and (d) gross profit is 25 % of cost. (Round ratios for computational purposes to 1 decimal place, e.g. 78.7% and final answers to 0 decimal places, e.g. 28,987.) Ending Inventory (a) Gross profit is 46% of sales 737100 (b) Gross profit is 60 % of cost 489836 (c) Gross profit is 36 % of sales 581600 (d) Gross profit is 25 % of cost x

Answer 1

Answer - Computation below

(a) Ending inventory if gross profit is 46% of sales

Gross profit = 46% of $2455000 = $1129300

Ending inventory = Goods available for sale + G.P - Sales

Ending inventory = $2062800 + $1129300 - $2455000 = $737100

(b) Ending inventory if gross profit is 60% of cost

So the sales revenue is 160% of cost which means cost of good sold would be = $2455000/160% = $1534375

Ending inventory = Cost of goods available for sale - cost of goods sold

Ending inventory = $2062800 - $1534375 = $528425

(c) Ending inventory if gross profit is 36% of sales

Gross profit = 36% of $2455000 = $883800

Ending inventory = Goods available for sale + G.P - Sales

Ending inventory = $2062800 + $883800 - $2455000 = $491600

(d) Ending inventory if gross profit is 25% of cost

So the sales revenue is 125% of cost which means cost of good sold would be = $2455000/125% = $1964000

Ending inventory = Cost of goods available for sale - cost of goods sold

Ending inventory = $2062800 - $1964000 = $98800