Question

Gemco Inc. uses the retail inventory method and has the following information available concerning its most recent accounting period:_________. Cost Retail Sales $1,200,000 Purchases $677,400 1,229,800 Beginning inventory 148,600 245,200 What is Gemco's estimated cost of ending inventory?

Answer 1

Answer:

$10,000

Explanation:

Estimated cost of ending inventory is calculated as;

= Retail beginning inventory + Purchase - Ending inventory - Sales

Retail beginning inventory = $148,600

Sales = $1,200,000

Purchases = $1,299,800

Ending inventory = $245,200

Cost of ending inventory = $148,600 + $1,299,800 - $245,200 - $1,200,000

Cost of ending inventory =