Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $100,000 in sales during the second quarter of this year. If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter, its estimated ending inventory by the gross profit method is:
A. $30,000.
B. $21,000.
C. $20,000.
D. $27,000.
E. $18,000.
Answer: C
Business
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