Question

Based on the following data, estimate the cost of the ending merchandise inventory:
Sales (net) $1,450,000
Estimated gross profit rate 42%
Beginning merchandise inventory $100,000
Purchases (net) 860,000
Merchandise available for sale $960,000
Cost of Ending Merchandise Inventory
Merchandise available for sale $
Less cost of merchandise sold
Estimated ending merchandise inventory $

Answer 1

Answer:

Ending inventory $119,000

Explanation:

Estimation of cost of ending merchandise inventory:

Merchandise available for sale $960,000

Less Cost of goods sold $841,000

[1,450,000* (100%-42%)]

Ending inventory $119,000

( $960,000 - $841,000)

Therefore the cost of the ending merchandise inventory will be $119,000