Presented below is information related to Bobby Engram Company. Compute the endi

Question

Presented below is information related to Bobby Engram Company. Compute the ending inventory at retail. Compute a cost-to-retail percentage under the following conditions. (Round ratios to 2 decimal places, e.g. 78.74%) Excluding both markups and markdowns. Excluding markups but including markdowns. Excluding markdowns but including markups. Including both markdowns and markups. Which of the methods in (b) above does the following? Provides the most conservative estimate of ending inventory Provides an approximation of lower-of-cost-or-market. Is used in the conventional retail method. Compute ending inventory at lower-of-cost-or-market. (Round ratio to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.) Compute cost of goods sold based on (d). (Round answer to 0 decimal places, e.g. 6,225.) Compute gross margin based on (d). (Round answer to 0 decimal places, e.g. 6,225.)

Explanation / Answer

1)Compute the ending inventory at retail Cost Retail Beginning inventory $63,900 $106,300 Purchases (net) $139,500 $219,800 Net markups $25,200 $203,400 $351,300 Less : Net markdowns -$32,900 Sales price of goods available $318,400 Less: Sales revenue -$189,100 Ending Inventory at Retail $129,300 2)Compute a cost-to-retail percentage under the following conditions. (Round ratios to 2 decimal places, e.g. 78.74%) Cost-to-retail percentage 1)Excluding both markups and markdowns. $203,000/($106,300+$219,800) 62.37% 2)Excluding markups but including markdowns. $203,000/($106,300+$219,800- $32900) 69.37% 3)Excluding markdowns but including markups. $203,000/($106,300+$219,800+ $25200) 57.90% 4)Including both markdowns and markups. $203,000/($106,300+$219,800+ $25200 -$32,900) 63.88% 3)Which of the methods in (b) above does the following? 1)Provides the most conservative estimate of ending inventory. Excluding markdowns but including markups. 2)Provides an approximation of lower-of-cost-or-market. Excluding markdowns but including markups. 3) Is used in the conventional retail method. Excluding markdowns but including markups. 4) Compute ending inventory at lower-of-cost-or-market Excluding markdowns but including markups. 57.90% Ending Inventory = 57.90% x $129,300 $74,863.71 5)Compute cost of goods sold based on (d). (Round answer to 0 decimal places, e.g. 6,225.) Cost of goods sold = Cost - Ending Inventory at lower of cost or market $128,536.29 6)Compute gross margin based on (d). (Round answer to 0 decimal places, e.g. 6,225.) Gross Margin = sales - Cost of good sold $60,563.71

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.