Answered

Get personalized answers to your specific questions with IDNLearn.com. Join our interactive Q&A community and get reliable, detailed answers from experienced professionals across a variety of topics.

On June 30, Joanna Fabrics has the following data pertaining to the retail inventory method. Goods available for sale: at cost $38,000; at retail $50,000; net sales $40,000; and ending inventory at retail $10,000. Compute the estimated cost of the ending inventory using the retail inventory method. The estimated cost of the ending inventory

Sagot :

Answer: 7600

Explanation:

The estimated cost of the ending inventory would be calculated as thus'

First, we have to calculate the cost to retail percentage which will be:

= cost/retail price

= 38000/50000

= 0.76

The cost of sales would be:

= net sales × cost to retail percentage

= 40000 × 0.76

= 30400

Then, the ending inventory would then be:

= 38000-30400

= 7600

Abiolataiwo2015idn

The estimated cost of the ending inventory is $7,600.

First step

Cost to retail percentage= Cost/Retail price

Cost to retail percentage = 38000/50000

Cost to retail percentage = 0.76

Second step

Cost of sales= Net sales × Cost to retail percentage

Cost of sales= 40000 × 0.76

Cost of sales= 30400

Third step

Estimated cost of ending inventory=38,000-30,400

Estimated cost of ending inventory= 7,600

Inconclusion the estimated cost of the ending inventory is $7,600.

Learn more here:https://brainly.com/question/21117285

Thank you for using this platform to share and learn. Keep asking and answering. We appreciate every contribution you make. Your questions deserve reliable answers. Thanks for visiting IDNLearn.com, and see you again soon for more helpful information.