Answered

Welcome to Westonci.ca, where curiosity meets expertise. Ask any question and receive fast, accurate answers from our knowledgeable community. Experience the ease of finding accurate answers to your questions from a knowledgeable community of professionals. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

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

abiolataiwo2015

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

Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.