Portland Ltd.estimates the cost of its physical inventory at March 31 for use in interim financial statements.The rate of markup on cost is 25%.The following account balances are available: What is the estimated dollar value of the inventory at March 31?
A)$18,000
B)$175,000
C)$81,000
D)$368,000

Question

Portland Ltd.estimates the cost of its physical inventory at March 31 for use in interim financial statements.The rate of markup on cost is 25%.The following account balances are available:  What is the estimated dollar value of the inventory at March 31?
A)$18,000 
B)$175,000 
C)$81,000 
D)$368,000

Quizplus · Accepted Answer

To find the estimated dollar value of the inventory, we need to add the cost of inventory to 25% of the cost of inventory. The total cost of inventory as per the given account balances is $64,800. So, adding 25% markup gives: 
$64,800 + ($64,800 x 0.25) = $81,000 
Therefore, the estimated dollar value of inventory at March 31 is $81,000.