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    angie343536's Avatar
    angie343536 Posts: 14, Reputation: 0
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    #1

    Feb 18, 2008, 11:44 PM
    Gross Profit Method
    The accountants for Ruiz Imports need to estimate the ending inventory balance so that they can prepare quarterly financial statements. The accountants have gathered the following information:

    Beginning inventory $96,950
    Sales $138,500
    Purchases $13,850
    Gross profit ratio 40%

    Use the gross profit method to estimate the ending inventory
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
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    #2

    Feb 20, 2008, 01:36 PM
    Beginning + Purchase = COGS + Ending. Now you have sales and gross profit ratio, then you can get the COGS. Then use the formula for ending inventory.
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