Question Details

Sauder Company reports goods available for sale 



1
The inventory of Pedigo Company was destroyed by fire on April 1. From an examination of the accounting records, the following data for the first three months of the year are obtained:

	Sales	$165,000
	Sales Returns and Allowances	5,000
	Purchases	90,000
	Freight-In	3,500
	Purchase Returns and Allowances	4,000

Instructions
Determine the merchandise lost by fire, assuming a beginning inventory of $60,000 and a gross profit rate of 40% on net sales.



2
Sauder Company reports goods available for sale at cost, $90,000. Beginning inventory at retail is $40,000 and goods purchased during the period at retail were $80,000. Sales for the period amounted to $88,000.

Instructions
Determine the estimated cost of the ending inventory using the retail inventory method.




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