Answer:
Ending inventory is $58,800
Explanation:
The formula for the gross profit ratio is as under:
Gross profit ratio = Gross Profit / Sales
And here Sales is $302,000 and Gross profit ratio is 30%.
By putting values we have:
30% = Gross profit / $302,000
Gross Profit = 30% * $302,000 = $90,600
We also know that:
Gross Profit = Sales - Cost of sales
By putting values we have:
$90,600 = $302,000 - Cost of sales
Cost of Sales = $302,000 - 90,600
Cost of Sales = $211,400
The difference between the cost of goods available for sale and cost of goods sold is ending inventory.
Ending Inventory = $270,200 - $211,400 = $58,800
