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.)

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Description: Subject - Acounting nBetween The Ears (BTE.com) is a popular Internet music store. During the current year, the company's cost of goods available for saleamounted to $474,000. The retail sales value of this merchandise amounted to $827,000. Sales for

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4CP: Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and...

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