Question

The beginning inventory at cost is $80,000.00 and at retail is $100,000.00. Purchases at cost are $160,000.00 and the retail value is $200,000.00. Net sales are $250,000.00. The ending inventory at cost is
A. $240,000
B. $50,000.00
C. $40,000
D. $192,000

Answer 1

Cost of goods available for is equal

80000+160000=240000

Retail value is equal

100000+200000=300000

This means that the cost of goods sold is 80% (240000÷300000) and gross profit is 20%

Sales= 250000 and it's cost is equal 200000 (250000×0.8)

Ending inventory

=240000-200000=40000...answer

Hope it helps!