Calculate the cost of sales during the period, for which the formula is Sales x cost-to-retail percentage . Calculate ending inventory, for which the formula is Cost of goods available for sale - Cost of sales during the period ..
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Ending inventory is needed by a business to calculate cost of goods sold. Month end closing journals are shown based on actual or estimated ending inventory.
Count Account for Your Month Ending Food Beverage Inventory To Produce Accurate Profit and Loss Statements. by John Nessel.
Explanation Under periodic inventory system inventory account is not updated for each purchase and each sale. All purchases are debited to purchases account. At the .
Minus Ending Inventory at the end of the year Equals Cost of Goods Sold; For example: $14,000 cost of inventory at beginning of year + $8,000 cost of additional .