Problem based on retail establishment


Carson Inc., a retail establishment, expects sales of $500,000 of a particular item in March. Its gross profit percentage is 60 percent. The ending inventory in February of this item cost $40,000 and the company wants an ending inventory of $38,000 (cost). How much needs to be purchased?

a) $38,000

b) $198,000

c) $498,000

d) $502,000

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Accounting Basics: Problem based on retail establishment
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