Store has the following information available:
|
Cost |
Selling Price |
Other |
|
|
Purchases during January 2003. |
$120,000 |
$170,000 |
|
|
Inventory balance January 1, 2003 |
$48,000 |
62,000 |
|
|
Sales during January. |
180,000 |
||
|
Average gross margin rate for the last three years |
25% |
||
1. On the basis of this information, estimate the cost of inventory on hand at January 31,2003, using the gross margin method. Round to the nearest whole percent.
2. How accurate do you think this method is?