1. At the beginning of the year Hinz Company had an inventory of $400000. During

1. At the beginning of the year Hinz Company had an inventory of $400000. During the year the company purchased goods costing $1600000. If Hinz Company reported ending inventory of $600000 and sales of $2000000 the companys cost of goods sold and gross profit rate must be$1000000 and 50%.$1400000 and 70%.$1000000 and 30%.$1400000 and 30%.2. The Merchandise Inventory account is used in each of the following except the entry to recordthe return of goods purchased.payment of freight on goods sold.payment within the discount period.goods purchased on account.3. On a classified balance sheet merchandise inventory is classified asproperty plant and equipment.an intangible asset.a current asset.a long-term investment.4. The Sales Returns and Allowances account does not provide information to management abouterrors in overbilling customers.inefficiencies in filling orders.possible inferior merchandise.the percentage of credit sales versus cash sales.