Required estimate the average cost of ending inventory and

Question

Problem - San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2011:

                                                   Cost                                       Retail

Beginning inventory                       $ 38,500                                $ 55,000  

Net purchases                               19,120                                   34,760  

Net markups                                                                              1,320  

Net markdowns                                                                          880  

Net sales                                                                                   35,200  

Required: Estimate the average cost of ending inventory and cost of goods sold for October. Do not approximate LCM.