Question

TB Nelson Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $180,000; the beginning inventory on June 1 was $54,000; and the cost of goods purchased during June amounted to $90,000. The estimated cost of TB Nelson Company's inventory on June 30 is Group of answer choices $21,600. $72,000. $126,000. $36,000.

Answer 1

$36,000

Step-by-step explanation:

Sales $180,000

Less:

Opening Inventory ($54,000)

Purchases ($90,000)

Closing Inventory $36,000

or

Gross Profit (180,000*40%) $72,000

Add;Opening inventory $54,000

Purchases $ 90,000

Less: Sales ($180,000)

Closing Inventory $36,000