Based on the following data, estimate the cost of the ending merchandise inventory:Sales (net) $1,450,000

Based on the following data, estimate the cost of the ending merchandise inventory:


Sales (net) $1,450,000
Estimated gross profit rate 42%
Beginning merchandise inventory $ 100,000
Purchases (net) 860,000
Merchandise available for sale $ 960,000




Answer:


Merchandise available for sale………………………………………………… $960,000
Less cost of merchandise sold [$1,450,000 × (100% – 42%)]……………… 841,000
Estimated ending merchandise inventory…………………………………… $119,000