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 estimated ending inventory value would be:
A. $20,000.
B. $22,000.
C. $19,500.
D. $82,000.
E. $60,000.
Answer: B
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Indicate whether the statement is true or false.