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In: Accounting

Grand, Inc. is a retail clothing store that uses the "Retail" method to value inventory. The...

Grand, Inc. is a retail clothing store that uses the "Retail" method to value inventory. The following information is presented below regarding the current operations of the company:

Cost

Retail
Initial Inventory

27,000

45,000

Purchase

58,000

116,000

Sales

125,000

Determine the ending inventory valuation for the current period using the "Retail Method":

Solutions

Expert Solution

Estimated ending inventory at cost (36000*52.80%) $                 19,006

Working:

Particulars Cost $ Retail $ Cost-to-Retail Ratio
Beginning inventory $                  27,000 $                 45,000
Gross Purchases $                  58,000 $               116,000
Goods available for sale $                  85,000 $               161,000
Cost-to-Retail percentage (85000/161000) 52.80%
Less:
Gross Sales $            (125,000)
Estimated ending inventory at retail $                 36,000
Estimated ending inventory at cost (36000*52.80%) $                 19,006

ekkarill92 answered 1 year ago
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