ABHAY Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account. The rate of mark-up on cost is 25%. The following information relates to the month of June.
Accounts receivable, June 1 $121,000
Inventory, June 1 147,000
Collections of accounts during June 184,000
Purchases during June 165,000
Accounts receivable, June 30 127,000
Instructions
Calculate the estimated cost of the inventory on June 30.

Question

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The Answer of ABHAY Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account. The rate of mark-up on cost is 25%. The following information relates to the month of June.
Accounts receivable, June 1 $121,000
Inventory, June 1 147,000
Collections of accounts during June 184,000
Purchases during June 165,000
Accounts receivable, June 30 127,000
Instructions
Calculate the estimated cost of the inventory on June 30.

ABHAY Co Prepares Monthly Income Statements