Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 49

A Retail Method
Between The Ears (BTE.com) is a popular Internet music store.uring the current year, the company's cost of goods available for sale amounted to $462,000.he retail sales value of this merchandise amounted to $840,000.ales for the year were $744,000.
Instructions
a.sing the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year.
b.t year-end, BTE.com takes a physical inventory.he general manager walks through the warehouse counting each type of product and reading its retail price into a tape recorder.rom the recorded information, another employee prepares a schedule listing theentire ending inventory at retail sales prices.he schedule prepared for the current year reports ending inventory at $84,480 at retail sales prices.
1.se the cost ratio computed in part a to reduce the inventorycounted by the general manager from its retail value to an estimate of its cost.
2.etermine the estimated shrinkage losses (measured at cost) incurred by BTE.com during the year.
3.ompute BTE.com's gross profit for the year.Include inventory shrinkage losses in the cost of goods sold.)
c.hat controls might BTE.com implement to reduce inventory shrinkage