QUESTION 7 American Importers reports net income of $50,000 and cost of goods sold of $250,000. If the company's gross profit rate was 50%, what was the company's sales revenue? QUESTION 8 Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson Company: o is minimizing funds tied up in inventory. o has a cost of goods sold that is increasing relative to its average inventory. o may be losing sales due to inventory shortages. o is increasing the amount of inventory on hand relative to sales. QUESTION 9 During a period when inventory costs are steadily increasing, which of the following is true? Net income will be higher under LIFO than under FIFO. o Income taxes will be lower under LIFO than under FIFO. O Ending inventory value will be higher under LIFO than under FIFO. o Cost of goods sold will be lower under LIFO than under FIFO