Question

EXERCISE 8.10 Estimating Inventory by the Retail Method Phillips Supply uses a periodic inventory system but needs to determine the approximate amount of inventory at the end of each month without taking a physical inventory. Phillips has provided the following inventory data. Cost Price Retail Selling Price Inventory of merchandise, June 30 $300,000 $500,000 Purchases during July 222,000 400,000 Goods available for sale during July $522,000 $900,000 Net sales during July $600,000 Estimate the cost of goods sold and the cost of the July 31 ending inventory using the retail method of evaluation. Was the cost of Phillips’s inventory, as a percentage of retail selling prices, higher or lower in July than it was in June? Explain.

Answer 1

Yes that is correct:)))