Thursday 7 May 2015

San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2013:

San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2013:

  Cost Retail
  Beginning inventory $ 35,000   $ 50,000  
  Net purchases   19,120     31,600  
  Net markups         1,200  
  Net markdowns         800  
  Net sales         32,000  


Required:
Calculate the table to estimate the average cost of ending inventory and cost of goods sold for October. Do not approximate LCM.
 save image
Explanation:
Cost-to-retail percentage $54120  66%

$82,000


Estimated ending inventory at cost = 66% × $50,000 = $33,000

No comments:

Post a Comment