Retail Method
Global Office Supply Uses the Retail Method to Estimate

Essay

Retail method
Global Office Supply uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended July 31:
Using the retail method:
$\begin{array}{|l|l|l|}\hline & \text { Cost } & \text { Retail } \\\hline \text { Sales }&&\$ 600,000\\\hline \text { Inventory, July } 1 & \$ 274,800 & \$ 396,000 \\\hline \text { Net purchases } & \$ 369,600&\$546,000 \\\hline \text { Goods available for sale } &\$ 544,400 & \$ 942,000 \\\hline\end{array}$ $\begin{array}{|l|l|}\hline \text { (a) Determine the cost ratio that should be used in }&\underline{\quad\quad}\% \\\text { estimating the inventory at July } 31 . \\\text { (b) Estimate the cost of the inventory at July } 31 .&\$\underline{\quad\quad} \\\hline \text { (c) Estimate the cost of goods sold for July. }&\$\underline{\quad\quad}\\\hline\end{array}$