Dakota Layne is opening up “Layne’s Women’s Fashions” on April 1. Dako

Dakota Layne is opening up “Layne’s Women’s Fashions” on April 1. Dakota’s sales forecast for the Spring/Summer of Year 1 is shown in the top row of the table.

She is going to purchase her merchandise 2 months in advance and her cost of goods sold is 70% of sales. Assume that Dakota has a starting inventory of $21,700 at the beginning of June. What is Dakota Layne’s Ending Inventory Balance in June?

Sales and Purchase Forecast
Layne’s Women’s Fashion
May June July August
Sales Forecast $12,000 $15,000 $16,000 $18,000
Purchases from Suppliers

Beginning Inventory $21,700
Plus: Additions
Less: Cost of Goods Sold
Ending Inventory

A) $19,800
B) $22,000
C) $22,400
D) $23,800
E) $25,300

ANSWER

D