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139. At the beginning of September, 2008, RFI Company reported Merchandise Inventory of $4,000. During the month, the company made purchases of $7,800. At September 31, 2008, a physical count of inventory reported $3,200 on hand. Cost of goods sold for the month is a. $600. b. $7,800 C. $8,600 d. $11,800 140. At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, the company's cost of goods sold and gross profit rate must be a. $1,000,000 and 50%. b. $1,400,000 and 30%. c. $1,000,000 and 30%. d. $1,400,000 and 70%. 141. During the year, Darla's Pet Shop's merchandise inventory decreased by $20,000. If the company's cost of goods sold for the year was $300,000, purchases must have been a. $320,000 b. $280,000 C. $260,000 d. Unable to determine. 142 Cost of goods available for sale is computed by adding a. beginning inventory to net purchases. b. beginning inventory to the cost of goods purchased. c. net purchases and freight-in. d. purchases to beginning inventory. 143. The Freight-in account a. increases the cost of merchandise purchased. b. is contra to the Purchases account c. is a permanent account. d. has a normal credit balance

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