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At May 31, Lily Company has net sales of $395,000 and cost of goods available for sale of $268,000.

Compute the estimated cost of the ending inventory, assuming the gross profit rate is 35%.

Respuesta :

The estimated cost of the ending inventory, assuming the gross profit rate is 35% is; $11250

How to find Estimated Cost?

Let us first calculate the gross profit;

Gross Profit = Sales * Profit%

Gross Profit = 395000 * 35%

Gross Profit = $138250

Cost of goods sold = Sales - Gross Profit

Cost of goods sold = 395000 - 138250

Cost of goods sold = $256750

Cost of ending inventory = Cost of goods available for sale - Cost of goods sold

Cost of ending inventory = 268000 - 256750

Cost of ending inventory = $11250

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