The amount of ending inventory is $182,400, when the gross profit percentage is 38, with the net sales of $180,000.
Closing inventory is also known as ending inventory, It is the amount of inventory which is left out at the end of the accounting year, and it is always valued at cost.
Formula of closing inventory(CI):
[tex]\text{CI}=\text{ Cost of Good Available - Cost of Goods Sold}[/tex]
Computation of closing inventory(CI):
According to the given information,
Net sales = $480,000,
Cost of goods available = $349,000,
Percentage of Gross Profit = 38%
First, the amount of cost of good must be finding to compute the closing inventory.
Profit amount which is included in net sales are:
[tex]= \text{Net Sales} \times \text{Gross Profit Percentage}\\\\= \$480,000\times38\%\\\\= \$182,400[/tex]
[tex]\text{Cost of Goods Sold}= \text{Sales Price}-\text{Cost Price}\\\\\text{Cost of Goods Sold}=\$349,000 - \$182,400\\\\\text{Cost of Goods Sold}= \$166,600[/tex]
Now, by substituting the values in the formula of closing inventory, the closing inventory would be:
[tex]\text{CI}= \$349,000 - \$166,600\\\\ \text{CI}= \$182,400[/tex]
Therefore, the closing inventory is $182,400.
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