This exercise illustrates the use of the retail inventory method to estimate ending inventory.
The records of Petite Clothiers report the following figures for the month of September:
|
Sales |
$79,000 |
|
Sales returns |
1,000 |
|
Freight on purchases |
2,400 |
|
Purchases (at cost) |
48,000 |
|
Purchases (at sales price) |
92,000 |
|
Purchase returns (at cost) |
2,000 |
|
Purchase returns (at sales price) |
3,000 |
|
Beginning inventory (at cost) |
30,000 |
|
Beginning inventory (at sales price) |
51,000 |
Instructions
Compute an estimate of the cost of ending inventory by using the retail inventory method.