Question

Stevens Company started the year with an inventory cost of $145,000. During the month of January, Stevens purchased inventory that cost $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

a. $107,000b. $58,000c. $91,000d. $69,300

Answer 1

Balance closing inventory = $107000

so correct option is a. $107,000

Step-by-step explanation:

given data

inventory cost = $145,000

purchased inventory cost = $53,000

sales totaled = $140,000

gross profit = 35%

to find out

estimated ending inventory

solution

we know Opening inventory cost i.e $145000 and purchases inventory cost i.e $53000

so both will be = $145000 +$53000 = $198000

and

Cost of goods sold will be

Cost of goods sold = 35% of sales totaled

Cost of goods sold = 35% × $140,000

Cost of goods sold = $91000

so

Balance closing inventory = Opening inventory cost + purchases inventory cost - Cost of goods sold

Balance closing inventory = $198000 - $91000

Balance closing inventory = $107000

so correct option is a. $107,000