Paulson Sailing Company sells boats as a supplement to its boat storage operations. Data for its boat sales for August 2019 are given below. The beginning inventory on August 1 was composed of the following items:

INSTRUCTIONS
Sales during the month were the 30€² Holiday and the 20€² Lake King, sold at the retail values shown on August 1.

1. What is the best method of valuing the ending inventory?
2. Determine the value of Paulson Sailing Company€™s ending inventory of items that were brought over from the beginning inventory using this method. Assume that the company€™s retail values had not changed.
3. Determine the cost of goods sold during August.
Analyze: What is the estimated gross profit on sales for August?

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Cost Retall $ 90,000 130,000 $114,000 28' Starfish 30' Perch 170,000 24' Sea King 52,000 60,000 30' Holiday 20' Lake King 120,000 92,000 56,000 69,000