Clooney Department Store estimates inventory by using the retail inventory method.The following information was developed: The estimated cost of the ending inventory is

Question

Clooney Department Store estimates inventory by using the retail inventory method.The following information was developed:  The estimated cost of the ending inventory is

Quizplus · Accepted Answer

Using the retail inventory method, the formula for estimating ending inventory cost is:
Estimated Cost of Ending Inventory = (Ending Retail Inventory x Cost-to-Retail Ratio)
=(($1,400,000 - $330,000) x 0.3)
= $336,000
Therefore, the answer is choice letter B, $336,000.

Clooney Department Store Estimates Inventory by Using the Retail Inventory