A company has goods available for sale of $250,000 at retail and $175,000 at cost.It also had sales of $210,000 for the period.What is the estimated cost of ending inventory,using the retail method?

Question

Quizplus · Accepted Answer

The cost-to-retail ratio is $175,000 / $250,000 = 0.7. The ending inventory at retail is $250,000 - $210,000 = $40,000. The estimated cost of ending inventory is $40,000 * 0.7 = $28,000.

A Company Has Goods Available for Sale of $250,000 at Retail