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a company uses the average cost retail method to estimate inventories. data for the first six months of 2024 include: beginning inventory at cost and retail were $88,500 and $139,000, net purchases at cost and retail were $331,000 and $499,000, and sales during the first six months totaled $509,000. the estimated inventory at june 30, 2024, would be:



Answer :

$83,850, is the estimated inventory on June 30, 2024.

What is the estimated inventory?

Price Retail.

Initial inventory: $139,000 $88.500

Add: Net shopping

$331,000 $499,000

Products that are for sale.

$419,500 $638,000

Price-to-retail ratio

= $419,500÷ $638,000 = 65%

Less than: Net sales ($509,000).

Estimated final stock levels at retail.

($638,000 -$509,000) $ 129,000

Estimated ending inventory, cost ($129,000 multiplied by 65%)

$83,850

Therefore, $83,850 would be the anticipated inventory on June 30, 2024.

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