1. On December 31, a fire destroyed most of the merchandise on hand at Winker's Wink Inc. The following information is available: Sales of $ 900,000; gross profit is 40% (based on retail); Purchases $ 750,000 (which included goods shipped FOB destination which were in transit on 12/31 in the amount of $ 60,000) Beginning inventory was $ 20,000. What was the amount of ending inventory prior to the fire using gross profit method?

a) 230,000

b) 170,000

c) 350,000

d) 410,000

2. Using the information from question # 1(or if the number changed due to randomizing the questions go to the question that is fire destroyed inventory of Winker's Wink Inc), what would be the inventory loss if the company had undamaged inventory priced at $ 10,000 and damaged inventory sold as salvage for $ 2000?

a) 162,000

b) 222,000

c) 158,000

d) 170,000

3. The advantages of using the periodic inventory system rather than the perpetual system is what?

a) Better internal control

b) Simplicity

c)Continual report of on-going inventory

d) An assurance that adequate inventory will be available

4. The Mayflower Co uses the retail inventory method to approximate cost of ending inventory. The cost of goods available for sale was $ 500,000 at cost and $ 800,000 at retail before considering net markups of $ 20,000 and net markdowns of $ 15,000. If sales were $ 710,000, how much was inventory at cost?

a) 57,000

b) 57,950

c) 61,750

d) 95,000