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24 July, 11:35

Based on the following data, estimate the cost of the ending merchandise inventory:

Sales (net) $1,450,000

Estimated gross profit rate 42%

Beginning merchandise inventory $100,000

Purchases (net) 860,000

Merchandise available for sale $960,000

Cost of Ending Merchandise Inventory

Merchandise available for sale $

Less cost of merchandise sold

Estimated ending merchandise inventory $

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Answers (1)
  1. 24 July, 11:44
    0
    Ending inventory $119,000

    Explanation:

    Estimation of cost of ending merchandise inventory:

    Merchandise available for sale $960,000

    Less Cost of goods sold $841,000

    [1,450,000 * (100%-42%) ]

    Ending inventory $119,000

    ($960,000 - $841,000)

    Therefore the cost of the ending merchandise inventory will be $119,000
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