Based on the Following Data, Estimate the Cost of Ending

question 87

Essay

Based on the following data, estimate the cost of ending merchandise inventory using the gross profit method. $\begin{array}{lr}\text { Sales } & \$ 250,000 \\\text { Estimated gross profit rate } & 25 \%\\\text { Beginning merchandise inventory } & \$ 9,000 \\\text { Purchases (net) } & 211,000 \\\text { Merchandise available for sale } & \$ 220,000\end{array}$

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Definitions:

Presentation Currency

The currency in which the financial statements of an entity are presented.

Non-Monetary Items

Items that are measured at historic cost rather than their current monetary value, such as property, plant, and equipment.

Functional Currency

The currency of the primary economic environment in which an entity operates, usually the local currency or the currency of the country where it primarily generates and expends cash.