Use the Following Information to Estimate the Third Quarter Ending

Multiple Choice

Use the following information to estimate the third quarter ending inventory under the gross profit method. This company's gross profit ratio is 20%. Third quarter beginning inventory: $54,000
Net sales for third quarter: $85,000
Net purchases for third quarter: $21,000

A) $101,000
B) $58,000
C) $35,000
D) $7,000
E) $14,000