St.Paul Corporation had a beginning inventory of $2,500 which would retail for $4,000.They made $9,000 in purchases which would retail at $14,400.The sales for the period were $15,000.What is the estimated cost of ending inventory under the retail inventory method?

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Quizplus · Accepted Answer

The cost-to-retail ratio is calculated as ($2,500 + $9,000) / ($4,000 + $14,400) = $11,500 / $18,400 = 0.625. The ending inventory at retail is $18,400 - $15,000 = $3,400. The estimated cost of ending inventory is $3,400 * 0.625 = $2,125.

StPaul Corporation Had a Beginning Inventory of $2,500 Which Would