Wade Company Estimates the Cost of Its Physical Inventory at March

question 51

Multiple Choice

Wade Company estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available: $\begin{array}{lr}\text { Inventory, March 1 } & \$ 2,000,000 \\\text { Purchases during March } & 1,000,000 \\\text { Purchase returns } & 52,000 \\\text { Sales during March } & 1,700,000\end{array}$ The estimate of the cost of inventory at March 31 would be

• A) $1,248,000.
• B) $1,360,000.
• C) $1,588,000.
• D) $1,673,000.

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