Based on the following data, estimate the cost of the ending merchandise inventory:
Sales $9,250,000
Estimated gross profit rate 36%
Beginning merchandise inventory $ 180,000
Purchases (net) 5,945,000
Merchandise available for sale $6,125,000
Answer:
Merchandise available for sale......................................................... $6,125,000
Less cost of merchandise sold [$9,250,000 × (100% – 36%)].................. 5,920,000
Estimated ending merchandise inventory.......................................... $ 205,000
