1) Under the retail inventory method, the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by

net sales.

goods available for sale at retail.

goods purchased at retail.

ending inventory at retail.

2) Sheridan Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 45% gross profit rate. During June, net sales amounted to $188000; the beginning inventory on June 1 was $58000; and the cost of goods purchased during June amounted to $94000. The estimated cost of Sheridan Company's inventory on June 30 is

$26100.

$48600.

$129500.

$84600.

3) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $58; Second purchase $70; Third purchase $54. If the company sold two units for a total of $207 and used FIFO costing, the gross profit for the period would be

$79.

$84.

$54.

$77.

4) Heathroton Company's goods in transit at December 31 include:

sales made	purchases made
(1) FOB destination	(3) FOB destination
(2) FOB shipping point	(4) FOB shipping point

Which items should be included in Heathroton's inventory at December 31?

(1) and (4)

(2) and (4)

(2) and (3)

(1) and (3)