Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended 31 May:
$\begin{array} { | l | l | l | }
\hline & \text { Cost } & \text { Retail } \
\hline \text { Sales } & & \$ 300,000 \
\hline \text { Inventory, 1 May } & \$ 137,400 & \$ 198,000 \
\hline \text { Net purchases } & \$ 184,800 & \$ 273,000 \
\hline \text { Goods available for sale } & \$ 322,200 & \$ 471,000 \
\hline
\end{array}$
-Determine the cost ratio that should be used in estimating the 31 May inventory using the retail method.

Question

Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended 31 May: 
$\begin{array} { | l | l | l | } 
\hline & \text { Cost } & \text { Retail } \
\hline \text { Sales } & & \$ 300,000 \
\hline \text { Inventory, 1 May } & \$ 137,400 & \$ 198,000 \
\hline \text { Net purchases } & \$ 184,800 & \$ 273,000 \
\hline \text { Goods available for sale } & \$ 322,200 & \$ 471,000 \
\hline
\end{array}$
-Determine the cost ratio that should be used in estimating the 31 May inventory using the retail method.

Quizplus · Accepted Answer

The Answer of  Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended 31 May: 
$\begin{array} { | l | l | l | } 
\hline & \text { Cost } & \text { Retail } \
\hline \text { Sales } & & \$ 300,000 \
\hline \text { Inventory, 1 May } & \$ 137,400 & \$ 198,000 \
\hline \text { Net purchases } & \$ 184,800 & \$ 273,000 \
\hline \text { Goods available for sale } & \$ 322,200 & \$ 471,000 \
\hline
\end{array}$
-Determine the cost ratio that should be used in estimating the 31 May inventory using the retail method.

Midwest Office Products Uses the Retail Method to Estimate Ending