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Garden World uses the retail method to estimate its monthly cost of goods sold and month-end...

Garden World uses the retail method to estimate its monthly cost of goods sold and month-end inventory. At May 31, the accounting records indicate the cost of goods available for sale during the month )beginning inventory plus purchases) totaled $540,000. these goods had been priced for resale at $1,000,000. sales in May totaled $400,000. the estimated inventory at May 31 is?

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Answer #1

Answer:-The estimated inventory at May 31 is:-$324000

Explanation:-Estimated closing inventory=($1000000-$400000)*($540000/$1000000)

=($600000*$540000)/$1000000

=$324000

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