48 Financial Acctg(Turck) (11)SupEx(inventory) docx Name (prepare on separate paper) (F) RETAIL INVENTORY METHOD 1 Home Improvement Store Inc 's (HISI) largest lender(creditor) has asked HISI for monthly financial statements as a condition attached to a new loan dated May 31, 2017 In order to avoid costly monthly physical counts of inventory, HISI management intends to use the retail inventory method to estimate Ending Inventory and Cost of Goods Sold for each month starting with June Using data available in its general ledger and additional accounting records, show how HISI can estimate (a) Cost of Goods Sold, (b) Ending Inventory and (c) Gross Profit(CkFig 152,000) for June Beginning Inventory, June 1, 2017 Net Purchases for June at Cost $ 60,000 287,200 at Retail $100,000 460,000 Net Sales for June $400,000 2 RETAIL INVENTORY METHOD (continued) Suppose the President of HISI suspects the Inventory Manager of theft (stealing inventory) After sending the Inventory Manager home for the day, the President calls for a physical inventory on June 30, 2017 Inventory counters are instructed to count 6 30 2017 inventory using retail value (i e , each item of inventory will be counted at its price tag value) The count results in a retail inventory valuation of $130,000 At cost value how much inventory seems to be missing

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<48 Financial Acctg(Turck)-(11)SupEx(inventory).docx Name (prepare on separate paper) (F) RETAIL INVENTORY METHOD 1. Home Improvement Store Inc.'s (HISI) largest lender(creditor) has asked HISI for

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