The College Book Store had sales of $285,300 in the month of October. Use the retail method to estimate the value of the inventory as of October 31 given the following financial information: (Round cost ratio to four decimal places) $\begin{array}{c}
\begin{array}{lll}
\text { October 1 to October 31}\
\text { Beginning Inventory}\
\text { Net Purchases (October)}\
\text { Goods Available for Sale}\
\end{array}
\begin{array}{lll}
\text { COST } & \text { RETAIL } \
\hline \$ 221,708 & \$ 331,800 \
183,771 & 271,100 \
\hline \$ 405,479 &
\end{array}
\end{array}$

Question

Quizplus · Accepted Answer

To estimate the ending inventory using the retail method, first calculate the cost-to-retail ratio: Cost of Goods Available for Sale ($405,479) / Retail Value of Goods Available for Sale ($331,800 + $271,100) = 0.6487. Then, calculate the ending inventory at retail: Goods Available for Sale at Retail ($602,900) - Sales ($285,300) = $317,600. Finally, apply the cost-to-retail ratio to the ending inventory at retail: $317,600 * 0.6487 = $213,586.00.

The College Book Store Had Sales of $285,300 in the Month