If the Estimated Rate of Gross Profit Is 30%, What

Multiple Choice

If the estimated rate of gross profit is 30%, what is the estimated cost of the inventory on September 30, based on the following data? $$\begin{array} { l l r } \text { Sep. } 1 & \text { Inventory (at cost) } & \$ 125,000 \\\text { Sep. 1-30 } & \text { Purchases, net (at cost) } & 300,000 \\\text { Sep. 1-30 } & \text { Sales } & 150,000\end{array}$$

A) $320,000
B) $192,500
C) $275,000
D) $105,000