Rosetta Company's July 31 inventory was destroyed by fire. The company's beginning inventory was $250,000, and purchases for January through July were $600,000. Sales for the same period were $900,000. The company's normal gross profit percentage is 30% of sales. Using the gross profit method, the July 31 inventory is estimated to be
a. $20,000.
b. $270,000.
c. $150,000.
d. $220,000.
Ans: d. $220,000.
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