Question

Given the data below for West Co., calculate the estimated ending inventory: Beginning Inventory $52423 Net...

Given the data below for West Co., calculate the estimated ending inventory:

Beginning Inventory

$52423

Net Purchases

$79640

Net Sales Revenue

$82685

Gross Margin Rate

32%

Select one:

a. $105604

b. $29009

c. $75837

d. $158522

Homework Answers

Answer #1
The correct answer is option C i.e. $ 75837
The same has been illustrated below
Calculation of Cost of Goods sold
Gross Margin = (Sales Revenue - Cost of Goods sold) / Sales Revenue * 100
32% =( 82685 - Cost of Goods sold ) / 82685*100
Cost of Goods sold = 56225.80
Calculation of ending inventory
Beginning inventory 52423
Add : Net purchases 79640
Less: Cost of goods sold 56225.8
Closing inventory 75837.2
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