Given the following, calculate the estimated cost of ending inventory using the gross profit method. Gross profit on sales   28% Beg. Inventory 1/1/2018  $60,000 Net Purchases   $44,000 Net Sales at Retail  $55,000

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.