Question 1

E. Preslay Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $200,000; the beginning inventory on June 1 was $60,000; and the cost of goods purchased during June amounted to $90,000. The estimated cost of E. Preslay Company's inventory on June 30 is

A) $70,000.

B) $140,000.

C) $30,000.

D) $24,000.

Question 2)

Coronado's Used Cars uses the specific identification method of costing inventory. During March, Coronado purchased three cars for $11600, $14600, and $19200, respectively. During March, two cars are sold for a total of $35100. Coronado determines that at March 31, the $14600 car is still on hand. What is Coronado's gross profit for March?

A) $2600.

B) $1300.

C) $4300.

D) $8900.