1) Finland Co. prepares monthly income statements. A physical inventory is taken only at year end; hence, month-end inventories must be estimated. All sales are made on account. The rate of markup on cost is 50%. The following information relates to the month of June: Accounts receivable, June 1 $20,000 Accounts receivable, June 30 30,000 Collection of accounts receivable during June 50,000 Inventory, June 1 36,000 Purchases of inventory during June 32,000 The estimated cost of the June 30 inventory is A. $24,000 B. $28,000 C. $38,000 D. $44,000

2) Dart Companys accounting records indicated the following information: Beginning inventory $ 500,000 Purchases during the year 2,500,000 Sales during the year 3,200,000 A physical inventory taken at year end resulted in an ending inventory of $575,000. Darts gross profit on sales has remained constant at 25% in recent years. Dart suspects some inventory may have been taken by a new employee. At the balance sheet date, what is the estimated cost of missing inventory? A. $25,000 B. $100,000 C. $175,000 D. $225,000