Asked by Mbilla Mwololo on Jul 06, 2024
Verified
Tack Room Clothing uses the retail method to estimate cost of ending inventory for its interim reports. From the following facts, estimate Tack Room's ending inventory at cost at August 31. 
Retail Method
An accounting method used to estimate ending inventory and cost of goods sold by calculating a cost-to-retail percentage and applying it to the retail price.
Estimated Cost
The anticipated cost to undertake a project or produce a good, used for budgeting and planning purposes.
Ending Inventory
The total value of all unsold goods remaining at the end of an accounting period, calculated for cost of goods sold reporting.
- Calculate the approximate value of closing stock by employing the retail inventory approach.
Verified Answer
$9,900/$13,200 × $700 = $525.00 Estimated cost
Learning Objectives
- Calculate the approximate value of closing stock by employing the retail inventory approach.
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