Chapter 16.II, Problem 1RE

Using the retail method, estimate the value of the ending inventory at cost on June 30 from the following information for Perfume Bazaar. Round the cost ratio to the nearest whole percent.

Perfume Bazaar Financial Highlights June l-June 30

	Cost	Retail
Beginning inventory. June 1	$43,000	$92,000
Net purchases (June)	26,000	55,300
Net sales (June) $132,400

	Cost	Retail	Goods available for sale at retail	$147,300
Beginning inventory. June 1	$43,000	$92,000	Net sales	–132,400
Net purchases (June)	26.000	55,300	Ending inventory at retail	$14,900
Goods available for sale	$69,000	$147,300	Ending inventory at cost =	$14,900\times 47\%$
Cost ratio =	$\frac{69,000}{147,300}=.468=47\%$			= $7,003