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 $472,000. The retail sales value of this merchandise amounted to $826,000. Sales for the year were $728,000. 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 $26,491 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 B3 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) Req B1 Req B2
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 $472,000. The retail sales value of this merchandise amounted to $826,000. Sales for the year were $728,000. 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 $26,491 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 B3 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) Req B1 Req B2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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 $472,000. The retail sales value of this merchandise amounted to $826,000. Sales for the year were $728,000.
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 $26,491 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 B3
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.)
Req B1
Req B2
(1) Estimated cost of goods sold:
Cost ratio for the current year:
Cost of goods available for sale
Retail prices of goods available for sale
Cost ratio
Estimated cost of goods sold
(2) Estimated ending inventory:
Cost of goods available for sale
Estimated cost of goods sold
Estimated ending inventory
<Roq A
%
Req B1 >
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