On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:Beginning inventory, January 1: $4,000Net sales: $80,000Net purchases: $78,000The company's gross margin ratio is 25%. Using the gross profit method, the cost of goods sold would be:
A. $60,000.
B. $63,000.
C. $19,500.
D. $20,000.
E. $58,500.
Answer: A
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