Question
Sheridan Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account.
Sheridan Co. prepares monthly income statements. Inventory is counted only at year end; thus, month-end inventories must be estimated. All sales are made on account. The rate of mark-up on cost is 25%. The following information relates to the month of May.
| Accounts receivable, May 1 | $21,500 | ||
| Accounts receivable, May 31 | 14,000 | ||
| Collections of accounts during May | 84,000 | ||
| Inventory, May 1 | 45,900 | ||
| Purchases during May | 57,000 |
Calculate the estimated cost of the inventory on May 31.
| Estimated cost of the inventory | $ |
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ISE Managerial Accounting
Authors: Ray H. Garrison, Eric Noreen, Peter C. Brewer
17th Edition
1260575683, 9781260575682
