A clothing store, Space Inc., presents monthly statements with gross profit figures and counts its inventory twice a year.
1. Estimate inventory cost using the retail inventory method, based on the following data (round all dollar figures to one decimal place and percentage figures to one decimal place):
Net sales for the month of February = $123,000
Inventory at cost, February 1 = $298,900
Purchases at cost during month = $70,000
Inventory at retail, February 1 = $545,700
Purchases at retail during the month = $120,000
2. Is additional information required to estimate inventory cost using the gross profit method?
3. Estimate inventory cost using the gross profit method.