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Between The Ears (BTE.com) is a popular Internet music store. During the current year, the company's cost of goods available for sale. amounted to $474,000. The retail sales value of this merchandise amounted to $827,000. Sales for the year were $745,000. At year-end, BTE.com takes a physical inventory. The general manager walks through the warehouse counting each type of product and reading its-retail price into a recorder. From the recorded information, another employee prepares a schedule listing the entire ending inventory at retail sales prices. The schedule prepared for the current year reports ending inventory at $32.281 at retail sales prices. Required: a. Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. b-1. Use the cost ratio computed in part a to reduce the inventory counted by the general manager from its retail value to an estimate of its cost. b-2. Determine the estimated shrinkage losses (measured at cost) incurred by BTE.com during the year. b-3. Compute BTE.com's gross profit for the year. (Include inventory shrinkage losses in the cost of goods sold.)

Between The Ears (BTE.com) is a popular Internet music store. During the current year, the company's cost of goods available for sale. amounted to $474,000. The retail sales value of this merchandise amounted to $827,000. Sales for the year were $745,000. At year-end, BTE.com takes a physical inventory. The general manager walks through the warehouse counting each type of product and reading its-retail price into a recorder. From the recorded information, another employee prepares a schedule listing the entire ending inventory at retail sales prices. The schedule prepared for the current year reports ending inventory at $32.281 at retail sales prices. Required: a. Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. b-1. Use the cost ratio computed in part a to reduce the inventory counted by the general manager from its retail value to an estimate of its cost. b-2. Determine the estimated shrinkage losses (measured at cost) incurred by BTE.com during the year. b-3. Compute BTE.com's gross profit for the year. (Include inventory shrinkage losses in the cost of goods sold.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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n Between The Ears (BTE.com) is a popular Internet music store. During the current year, the company's cost of goods available for sale amounted to $474,000. The retail sales value of this merchandise amounted to $827,000. Sales for the year were $745,000. At year-end, BTE.com takes a physical inventory. The general manager walks through the warehouse counting each type of product and reading its retail price into a recorder. From the recorded information, another employee prepares a schedule listing the entire ending inventory at retail sales prices. The schedule prepared for the current year reports ending inventory at $32,281 at retail sales prices. Required: a. Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. b-1. Use the cost ratio computed in part a to reduce the inventory counted by the general manager from its retail value to an estimate of its cost. b-2. Determine the estimated shrinkage losses (measured at cost) incurred by BTE.com during the year. b-3. Compute BTE.com's gross profit for the year. (Include inventory shrinkage losses in the cost of goods sold.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req 82 Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. (Round "Cost ratio" to nearest whole percent.) (1) Estimated cost of goods sold: Cost ratio for the current year Cost of goods available for sale Retal prices of goods available for sale Cost ratio Rep3 Estimated cost of goods sold (2) Estimated ending inventory: %
Transcribed Image Text:n Between The Ears (BTE.com) is a popular Internet music store. During the current year, the company's cost of goods available for sale amounted to $474,000. The retail sales value of this merchandise amounted to $827,000. Sales for the year were $745,000. At year-end, BTE.com takes a physical inventory. The general manager walks through the warehouse counting each type of product and reading its retail price into a recorder. From the recorded information, another employee prepares a schedule listing the entire ending inventory at retail sales prices. The schedule prepared for the current year reports ending inventory at $32,281 at retail sales prices. Required: a. Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. b-1. Use the cost ratio computed in part a to reduce the inventory counted by the general manager from its retail value to an estimate of its cost. b-2. Determine the estimated shrinkage losses (measured at cost) incurred by BTE.com during the year. b-3. Compute BTE.com's gross profit for the year. (Include inventory shrinkage losses in the cost of goods sold.) Complete this question by entering your answers in the tabs below. Req A Req B1 Req 82 Using the retail method, estimate (1) the cost of goods sold during the year and (2) the inventory at the end of the year. (Round "Cost ratio" to nearest whole percent.) (1) Estimated cost of goods sold: Cost ratio for the current year Cost of goods available for sale Retal prices of goods available for sale Cost ratio Rep3 Estimated cost of goods sold (2) Estimated ending inventory: %
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