Hughes Medical Supply, a Retail Business, Had Net Sales of $92,400

Essay

Hughes Medical Supply, a retail business, had net sales of $92,400 during January. Purchases of merchandise during the month amounted to $42,700, of which $27,400 had been paid for by the end of January. The merchandise purchased had a retail sales value of $59,000. On January 1, inventory on hand cost $26,180 and had a retail sales value of $39,400. Traditionally, Hughes' gross margin percentage has been 30 percent.
Use the gross margin estimation method to determine the cost of Hughes' inventory at the end of January.