Dianna Co Prepares Monthly Income Statements Required:
Calculate the Estimated Cost of the Inventory on September

Essay

Dianna 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 20%. The following information relates to the month of September.
$\begin{array} { l r } \text { Accounts receivable, September 1 } & \$ 121,000 \\\text { Inventory, September 1 } & 147,000 \\\text { Collections of accounts during September } & 184,000 \\\text { Purchases during September } & 165,000 \\\text { Accounts receivable, September } 30 & 127,000\end{array}$
Required:
Calculate the estimated cost of the inventory on September 30.