TB Nelson Company Prepares Monthly Financial Statements and Uses the Gross

question 14

Multiple Choice

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

• A) $21,600.
• B) $36,000.
• C) $72,000.
• D) $126,000.

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