Worked-example setupScope and assumptions
- Cedar Trail is fictional, and the balances, sales, historical margin, declared average-cost retail variant, and pool scope are supplied.
- The two estimates use separate populations and do not replace a required count.
- Period
- One inventory period
- Units
- US dollars and decimal rates
- Rounding
- Carry full precision; display dollars to cents and rates as percentages
Estimate from a gross-margin relationship
Cedar has $15,000 beginning inventory, $75,000 net purchases, $110,000 net sales, and a supplied 25 percent historical gross margin. Goods available cost $90,000. Estimated gross profit is $27,500, and estimated cost of goods sold is $82,500. Estimated ending inventory is $7,500.
Estimate from a separate retail pool
A separate average-cost retail pool has $100,000 at cost and $160,000 at retail. Its cost-to-retail ratio is 62.5 percent. After $120,000 of net sales, $40,000 remains at retail and the estimated cost is $25,000.
Both estimates reconcile under the supplied facts. Neither proves ending units, ownership, condition, omitted retail movements, or that the historical relationship remains representative. Complete the independent Northstar estimation task.
Verified calculation · inventory estimation analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- gross profit estimates
- 1 field
Inspect data
{
"loss_estimate": {
"beginning_inventory": 15000,
"historical_gross_margin_rate": 0.25,
"net_purchases": 75000,
"net_sales": 110000
}
}- retail estimates
- 1 field
Inspect data
{
"store_pool": {
"goods_available_at_cost": 100000,
"goods_available_at_retail": 160000,
"net_sales": 120000
}
}Recomputed result
| Measure | Value |
|---|---|
| loss estimate estimated cost of goods sold | 82,500 |
| loss estimate estimated ending inventory | 7,500 |
| loss estimate estimated gross profit | 27,500 |
| loss estimate goods available at cost | 90,000 |
| store pool cost to retail ratio | 0.625 |
| store pool ending inventory at retail | 40,000 |
| store pool estimated ending inventory at cost | 25,000 |