E. Waterway 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 $195000; the beginning inventory on June 1 was $50000; and the cost of goods purchased during June amounted to $94000. The estimated cost of E. Waterway Company's inventory on June 30 is
a. $27000.
b. $20000.
c. $66000.
d. $128000.