Beginning inventory is $28 000. Purchases for the year are $110 000. Sales revenues are $180 000. The company's normal Gross profit percent is 60%. How much is the Estimated cost of ending inventory?

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Quizplus · Accepted Answer

The cost of goods sold (COGS) is calculated as Sales Revenues minus Gross Profit. Gross Profit is 60% of Sales Revenues, so Gross Profit = 0.60 * $180,000 = $108,000. Therefore, COGS = $180,000 - $108,000 = $72,000. The cost of goods available for sale is Beginning Inventory + Purchases = $28,000 + $110,000 = $138,000. The Estimated cost of ending inventory is Cost of Goods Available for Sale - COGS = $138,000 - $72,000 = $66,000.

Beginning Inventory Is $28 000