Kesler, Inc. 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:

Inventory, March 1 $550,000

Purchases 430,000

Purchase returns 20,000

Sales during March 750,000

The estimate of the cost of inventory at March 31 would be

a. $210,000.

b. $360,000.

c. $397,500.

d. $280,000.

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