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question 1 the bubba company uses the gross profit method to estimate inventory and 4286860

Question

1. The Bubba Company uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. The average gross profit rate is 25 percent of sales. The following data relate to the month of May:

Inventory cost, May 1 $30,000

Purchases during the month at cost 80,400

Sales 100,800

Sales returns 3,600

Using the data above, what is the estimated ending inventory at May 31?

$24,300

$25,200

$34,800

$37,500

 

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