ABHAY Co Prepares Monthly Income Statements Instructions
Calculate the Estimated Cost of the Inventory on June

Essay

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.
$\begin{array}{llcc} \text { Accounts receivable, June 1} & \$121,000 \\ \text { Inventory, June 1} &147,000\\ \text { Collections of accounts during June } &184,000\\ \text {Purchases during June } &165,000\\ \text { Accounts receivable, June 30 } &127,000\\\end{array}$

Instructions
Calculate the estimated cost of the inventory on June 30.