Question Details

Tucker Department Store utilizes the retail inventory method 



1.	Under the gross profit method, each of the following items are estimated except for the 
a.	cost of ending inventory.
b.	cost of goods sold.
c.	cost of goods purchased.
d.	gross profit.


2.	Under the retail inventory method, the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by
a.	net sales.
b.	goods available for sale at retail.
c.	goods purchased at retail.
d.	ending inventory at retail.

	
3.	Stark Department Store estimates inventory by using the retail inventory method. The following information was developed:
	 At Cost		  At Retail	
Beginning inventory	€318,000	€   750,000
Goods purchased	900,000	1,350,000
Net sales		1,200,000
The estimated cost of the ending inventory is
a.	€696,000.
b.	€522,000.
c.	€882,000.
d.	€900,000.

	4.	Tucker Department Store utilizes the retail inventory method to estimate its inventories. It calculated its cost to retail ratio during the period at 75%. Goods available for sale at retail amounted to $400,000 and goods were sold during the period for $250,000. The estimated cost of the ending inventory is
a.	$150,000.
b.	$300,000.
c.	$112,500.
d.	$200,000.

5.	Wade Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $60,000; the beginning inventory on June 1 was $18,000; and the cost of goods purchased during June amounted to $27,000. The estimated cost of Wade Company's inventory on June 30 is
a.	$9,000.
b.	$36,000.
c.	$15,000.
d.	$24,000.




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