The following information was developed for Richt Department Store:

(a) If Richt Department Store estimates inventory by using the retail inventory method, what is the estimated cost of ending inventory?

(b) If Richt Department Store uses the gross profi t method and net sales are $500,000, the gross profi t rate is 30%, and cost of goods available for sale is $400,000, what is the estimated cost of ending inventory?

Transcribed Image Text:

At Cost At Retail $ 655,000 1,345,000 1,200,000 Beginning inventory Goods purchased | Net sales $400,000 800,000