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Originally Posted by mstcrow5429
In the official study guide, question 40 is as follows:
Net purchases for the year amounted to $80,000. The merchandise inventory at the beginning of the year was $19,000. On sales of $120,000, a 30 percent gross profit on the selling price was realized. The inventory at the end of the year was ($15,000)
I don't know how or why it's $15,000.
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Beginning inventory $ 19,000
Purchases made during year $ 80,000
TOTAL INVENTORY $ 99,000
Sales $120,000
Profit amount (30% of $120K) - 36,000
INVENTORY SOLD $ 84,000
TOTAL INVENTORY $ 99,000
Inventory amount sold - 84,000
INVENTORY ON HAND $ 15,000