Hard Candy has a beginning inventory of $1,600 with a retail value of $2,000. June purchases were $3,000, with a retail value of $5,000 and retail sales were $4,700. What is the June 30 estimated ending inventory at cost under the retail method? (Round any percentages to two decimal places, X.XX%, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The retail method estimates ending inventory at cost by first finding the cost-to-retail percentage and then applying it to the ending inventory at retail. 1. Calculate the cost-to-retail percentage:   - Beginning inventory + Purchases at cost = $1,600 + $3,000 = $4,600   - Beginning inventory + Purchases at retail = $2,000 + $5,000 = $7,000   - Cost-to-retail percentage = ($4,600 / $7,000) * 100 = 65.71%2. Calculate ending inventory at retail:   - Beginning inventory + Purchases at retail - Sales = $2,000 + $5,000 - $4,700 = $2,3003. Apply the cost-to-retail percentage to the ending inventory at retail:   - Estimated ending inventory at cost = $2,300 * 65.71% = $1,511.33, rounded to the nearest dollar = $1,511.

Hard Candy Has a Beginning Inventory of $1,600 with a Retail