Asked by Cortni Mckinney on Apr 24, 2024
Shannon's Department Store prepares monthly financial statements but only takes a physical count of merchandise inventory at the end of the year. The following information has been developed for the month of July: At Cost At Retail Beginning inventory $36,000$50,000 Merchandise purchases 99,000150,000\begin{array} { l r r } & \text { At Cost } & \text { At Retail } \\\text { Beginning inventory } & \$ 36,000 & \$ 50,000 \\\text { Merchandise purchases }& 99,000 & 150,000\end{array} Beginning inventory Merchandise purchases At Cost $36,00099,000 At Retail $50,000150,000 The net sales for July amounted to $150000.
Instructions
Use the retail inventory method to estimate the ending inventory at cost for July. Show all computations to support your answer.
Retail Inventory Method
An accounting method used by retailers to estimate inventory cost by relating the cost of goods sold to retail sales.
Net Sales
The amount of revenue a company generates from its sales activities after deducting any returns, allowances, and discounts.
Beginning Inventory
The value of a business's inventory at the start of an accounting period.
- Compute ending inventory using the retail inventory method.
Learning Objectives
- Compute ending inventory using the retail inventory method.