On March 31 a Company Needed to Estimate Its Ending

Multiple Choice

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4,000 Net sales: $80,000
Net purchases: $78,000
The company's gross margin ratio is 25%.
- Using the gross profit method, the estimated ending inventory value would be:

A) $19,500.
B) $60,000.
C) $20,000.
D) $82,000.
E) $22,000.