Answer:
d. $413,000
Explanation:
Sales = $1,160,000
Less: Cost of Goods Sold (1,160,000*70%) = <u>($812,000)</u>
Gross Profit = 348,000
Note: Since gross profit margin is 30% of the sales, the cost of goods sold must be 70% of sales.
Beginning inventory on Jan.1, 2016 = $340,000
Purchase inventory from Jan.1, 2016 to May 1,2016 = <u>$885,000</u>
Total Inventory = $1,225,000
Less: Cost of Goods sold = <u>($812,000)</u>
Estimated Inventory on May.1 2016 = $413,000
