On June 30 a Company Needed to Estimate Its Ending

Multiple Choice

On June 30 a company needed to estimate its ending inventory to prepare its second quarter financial statements. The following information is available: Beginning inventory, April 1: $6,000
Net sales: $70,000
Net purchases: $36,000
The company's gross margin ratio is 12%. Using the gross profit method, the cost of goods sold would be:

A) $8,400
B) $34,000
C) $61,600
D) $40,000
E) $35,200