Question 1: The following information is available for Torino Corp. for its most recent year:
Net sales ............................................. $3,600,000
Freight-in ............................................ 90,000
Purchase discounts .................................... 50,000
Ending inventory ...................................... 240,000
The gross margin is 40 percent of net sales. What is the cost of goods available for sale?
a. $1,680,000
b. $1,920,000
c. $2,400,000
d. $2,440,000
Question 2: The following information is available for the Neptune Company for the three months ended March 31 of this year:
Inventory, January 1 .................................. $ 450,000
Purchases ............................................. 1,700,000
Freight-in ............................................ 100,000
Sales ................................................. 2,400,000
The gross margin was estimated to be 25 percent of sales. What is the estimated inventory balance at March 31?
a. $350,000
b. $450,000
c. $562,500
d. $600,000.