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Global office supply uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended July 31.
Sales 600,000 (retail)
Inventory, July 1 274,800 (cost) 546,000 (retail)
Net purchases 369,600 (cost) 546,000 (retail)
Goods available for sale 644,400 (cost) 942,000 (retail)
Using the retail method:
a) determine the cost ratio that should be used in estimating the inventory at July 31
b) estimate the cost of inventory at July 31
c) estimate the cost of goods sold for July
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