Assume Dollar Lieutenant

Store estimates its inventory by the gross margin method when preparing monthly financial statements (it uses the periodic method otherwise). For the past two years, the cost of goods purchased has averaged 62

percent of net sales. Assume further that the company's inventory records for its stores reveal the following data:

$540,000 Inventory: June 1, 2020....... Transactions during June Purchases...... Sales....... $5,100,000 $8,340,000 Requirement 1. Estimate the June 30, 2020, inventory using the gross margin method Cost of goods sold Estimated cost of ending inventory