Using the retail method, estimate the value of the ending inventory at cost on September 30 from the following information for Scandinavian Furniture Designs, Inc. Round the cost ratio to the nearest tenth of a percent.
Scandinavian Furniture Designs. Inc.
September 1-September 30
Cost | Retail | |
Beginning Inventory. September 1 | $150,000 | $450,000 |
Purchases (September) | 90.000 | 270.000 |
Net Sales (September) $395,000 |
To calculate: The value of the ending inventory at cost on September 30 from the following information for Scandinavian Furniture Designs, Inc. with the help of the retail method and round the cost ratio to the nearest tenth of a percent.
Given Information:
The following table contain information of Scandinavian Furniture Designs of September month.
Formula used:
Step 1: Relation between beginning Inventory, Net Purchased and Goods available for sales, is given by:
Step 2: The cost ratio is given by:
Step 3: The Ending inventory at retail is given by:
Step 4: The Ending inventory at cost is given by:
Calculation:
List the beginning inventory and purchases and calculate the goods available for sale
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