How do you calculate ending inventory?


The two methods for calculating ending inventory include the gross profit method and the retail inventory method. The ending inventory is the number of units of inventory that the company on hand at the end of an accounting period. This figure is need for various accounting calculations, including cost of goods sold.

Using the gross profit method, add together the cost of the beginning inventory and the total cost of additional items that were purchased during the period to get the cost of goods available. Subtract the estimated cost of goods sold by the cost of goods available.

With the retail inventory method use the proportion of the retail price to costs in prior periods for a more exact amount.

Q&A Related to "How do you calculate ending inventory?"
1. Ending inventory can be determined by plugging the appropriate values into the following formula: Beginning inventory + net purchases - cost of goods sold (CoGS) = ending inventory
if it is the work in process account(which it sounds like) do this. Beginning inventory.Direct Materials Used.Direct Labor.Manufacturing Overhead.Cost of Goods Manufactured. =Ending
Beginning Direct Materials. Add: Materials purchased during period. Less: Materials Used during period. Equals: Ending Direct Materials.
1. Determine the amount of cost of goods sold for the period. You can find this amount on the income statement. Assume you have the amount of $550,000 for cost of goods sold. Ad.
1 Additional Answer Answer for: calculate ending inventory
How to Calculate Ending Inventory
Ending inventory measures the value of goods, inputs or materials available to either use or sell at the end of an inventory accounting period. A business uses ending inventory to forecast sales, analyze pricing schemes and determine whether it needs to... More »
Difficulty: Moderately Easy
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