A clothing store, Interlude Inc., had a fire at the end of February, and so used the gross profit method to estimate inventory cost.
1. Estimate the ending inventory cost based on the following data:
Net sales for the month of February = $123,000
Inventory at cost February 1 = $298,900
Purchases at cost during month = $70,000
Gross profit = 60%
2. Is additional information needed to estimate inventory cost using the retail method?
3. Estimate inventory cost using the retail method.