On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:
sales Jan. 1- July 8: 700,000
inventory Jan. 1: 130,000
purchases Jan.1- July 8: 640,000
gross profit ratio : 30%
What is the estimated inventory on July 8 immediately prior to the fire?
A. $192,000
B. $490,000
C. $510,000
D. $280,000
Answer: D. $280,000
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