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Tate Tasers Inc. is preparing interim financial statements for the quarter ending 31 March 20X1 and needs to estimate the value of inventory on hand
Tate Tasers Inc. is preparing interim financial statements for the quarter ending 31 March 20X1 and needs to estimate the value of inventory on hand at the end of the quarter. Physical inventory counts are taken only at the end of the fiscal year. The following information is available:
| Beginning inventory | $ | 550,000 | |
| Purchases | 1,050,000 | ||
| Sales | 2,100,000 | ||
| Sales returns (to stock) | 60,000 | ||
| In-bound shipping on purchases | 41,000 | ||
| Out-bound shipping to customers | 57,000 | ||
| HST on purchases | 132,000 | ||
| HST on net sales | 205,000 | ||
| Import duties | 60,000 | ||
| Inventory storage costs | 9,000 |
|
The average gross margin ratio is 30%. Required: Using the gross margin method, determine the cost of ending inventory and the cost of sales for the quarter.
ENDING INVENTORY:
COST OF SALES:
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