Question

A retail company has goods available for sale of $300,000 at retail and $210,000 at cost, and ending inventory of $80,000 at retail. What is the estimated cost of goods sold?

Answer 1

$154,000

Step-by-step explanation:

We will calculate estimated cost of goods sold as shown below.

= Cost of goods available for sale at cost / Cost of goods available for sale at retail × 100

= $210,000 / $300,000 × 100

= 70%

Then,

80,000 × 70% = 56,000

Therefore,

Estimated cost of goods sold

= 210,000 - 56,000

= 154,000