=+Selected data on merchandise inventory, purchases, and sales for Gainesville Co. and Tallahassee Co. are as follows:

Cost Retail Gainesville Co.

Merchandise inventory, April 1 $ 200,000 $ 300,000 Transactions during April:

Purchases (net) 2,520,000 3,700,000 Sales 3,550,000 Sales returns and allowances 50,000 Tallahassee Co.

Merchandise inventory, October 1 $ 300,000 Transactions during October through December:

Purchases (net) 1,800,000 Sales 2,796,000 Sales returns and allowances 96,000 Estimated gross profit rate 36%

Appendix