Question :
116. During January, Sundown Corporation had sales of $300,000 and a : 1229790
116. During January, Sundown Corporation had sales of $300,000 and a cost of goods available for sale of $600,000. The company consistently earns a gross profit rate of 45%. Using the gross profit method, the estimated inventory at January 31 amounts to:
A. $135,000.
B. $435,000.
C. $165,000.
D. $465,000.
117. Colonial uses the retail method to estimate its monthly cost of goods sold and month-end inventory. At August 31, the accounting records indicate the cost of goods available for sale during the month (beginning inventory plus purchases) totaled $270,000. These goods had been priced for resale at $675,000. Sales in August totaled $450,000. The estimated inventory at August 31 is:
A. $48,000.
B. $90,000.
C. $120,000.
D. $270,000.
118. Garden World uses the retail method to estimate its monthly cost of goods sold and month-end inventory. At May 31, the accounting records indicate the cost of goods available for sale during the month (beginning inventory plus purchases) totaled $540,000. These goods had been priced for resale at $900,000. Sales in May totaled $480,000. The estimated inventory at May 31 is:
A. $540,000.
B. $252,000.
C. $420,000.
D. $288,000.
During the current year, Carl Equipment Stores had net sales of $600 million, a cost of goods sold of $500 million, average accounts receivable of $75 million, and average inventory of $50 million.
119. Carl Equipment’s inventory turnover rate is:
A. 6.7 times.
B. 10 times.
C. 12 times.
D. 1.2 times.
120. Assuming a 365-day year, the number of days required for Carl Equipment to convert its average inventory into cash is:
A. 36.5.
B. 73.0.
C. 24.3.
D. 304.2.
During the current year, Carl Equipment Stores had net sales of $500 million, a cost of goods sold of $400 million, average accounts receivable of $60 million, and average inventory of $50 million.
121. Carl Equipment’s inventory turnover rate is:
A. 6.7 times.
B. 8 times.
C. 10 times.
D. 1.25 times.
122. Assuming a 365-day year, the number of days required for Carl Equipment to convert its average inventory into cash is:
A. 36.5.
B. 45.6.
C. 54.4.
D. 292.
Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended May 31:
123. Determine the cost ratio that should be used in estimating the May 31 inventory using the retail method.
A. 63.8%.
B. 69.4%
C. 66.0%.
D. 68.4%.
124. Estimate the cost of the May 31 inventory using the retail method.
A. $116,964.
B. $137,400.
C. $150,425.
D. $204,000.
125. Estimate the cost of goods sold for May using the retail method.
A. $137,400.
B. $150,400.
C. $205,236.
D. $319,600.
Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250). Beginning inventory for the month was $60,000; purchases for the month were $175,000; and gross profit was 43%.
126. What were the gross sales for the month?
A. $129,000.
B. $171,000.
C. $300,000.
D. $304,750.
127. What were the goods available for sale for the month?
A. $129,000.
B. $171,000.
C. $235,000.
D. $304,750.
128. What was the gross profit for the month?
A. $129,000.
B. $171,000.
C. $235,000.
D. $304,750.
129. What was the cost of goods sold for the month?
A. $129,000.
B. $171,000.
C. $235,000.
D. $304,750.
130. What was the ending inventory for the month?
A. $60,000.
B. $64,000.
C. $129,000.
D. $175,000.
