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The Denver Company uses the gross profit method to estimate its inventory in interim financial statements. The markup on cost is 30%. The following information
The Denver Company uses the gross profit method to estimate its inventory in interim financial statements. The markup on cost is 30%. The following information is available:
| January 1, 2004, inventory balance | $12,500 |
| Purchases | 25,000 |
| Sales during January | 20,800 |
The estimated inventory at January 31, 2004, is
| a. | $22,500 |
| b. | $25,900 |
| c. | $21,500 |
| d. | $16,100 |
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