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on the basis of the following data Cost Retail June 1 Inventory $ 155.000 5 272.000 June 1-30 Purchases (net) 2 380 180 3.817
Estimate the cost of the merchandise inventory at June 30 by the retal method Refer to the Amount Descriptions list provided
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Answer #1
Estimated Cost of Merchandise Inventory
June 30
1 Cost Retail
2 Inventory, June 1 $155000 $272000
3 Purchases (net) 2380180 3817000
4 Goods available for sale $2535180 $4089000
5 Ratio of cost to retail price (2535180*100/4089000)= 62%
6 Inventory, June 30, at retail price $534000
7 Inventory, June 30, at estimated cost price ($534000*62%) $331080

Inventory, June 30, at retail price= Inventory, June 1+Purchases-Sales

= $272000+3817000-3555000= $534000

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