At the beginning of the year, Downtown Athletic had an inventory of $200,000. During the year, the company purchased goods costing $800,000. If Downtown Athletic reported ending inventory of $300,000 and sales of $1,050,000, their cost of goods sold and gross profit rate must be:
a) $500,000 and 52.4%
b) $700,000 and 33.3%
c) $500,000 and 33.3%
d) $700,000 and 66.7%