Using the retail method, estimate the value of the ending inventory at cost on August 31 from the following information for Ripe ’N Ready Fruit Wholesalers. Inc.
Ripe ’N Ready Fruit Wholesalers, Inc.Financial Highlights August 1-August 31 | ||
Cost | Retail | |
Beginning Inventory | $600,000 | $800,000 |
Net Purchases (August) | 285,000 | 380,000 |
Net Sales (August) $744,000 |
To calculate: The value of the ending inventory at cost on August 31 from the following information for Ripe ’N Ready Fruit Wholesaler, Inc., using the retail method.
Given Information:
The following table contain information of Ripe ‘N Ready Fruit Wholesalers of August 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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