Answered: Cost Retail Beginning inventory $…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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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 2021:

	Cost	Retail
Beginning inventory	$	47,000	$	62,000
Net purchases		10,480		32,800
Net markups				2,400
Net markdowns				1,400
Net sales				44,000

Required:
Complete the table below to estimate the average cost of ending inventory and cost of goods sold for October using the information provided. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign.)

	Cost	Retail	Cost-to-Retail Ratio
Beginning inventory	$47,000	$62,000
Net purchases	10,480	32,800
Net markups		2,400
Net markdowns		(1,400)
Goods available for sale	57,480	95,800

Cost-to-retail percentage				%

Net sales
Estimated ending inventory at retail		$95,800
Estimated ending inventory at cost
Estimated cost of goods sold

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