Exercise 9-22 The records of Novak’s Boutique report the following data for the

Question

Exercise 9-22

The records of Novak’s Boutique report the following data for the month of April.

Sales revenue $95,600 Purchases (at cost) $47,200

Sales returns 1,800 Purchases (at sales price) 85,800

Markups 9,500 Purchase returns (at cost) 1,800

Markup cancellations 1,400 Purchase returns (at sales price) 2,800

Markdowns 8,600 Beginning inventory (at cost) 36,103

Markdown cancellations 2,700 Beginning inventory (at sales price) 50,600

Freight on purchases 2,100

Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Ending inventory using conventional retail inventory method $________

Explanation / Answer

ending inventory at cost = 42000*.59 = $ 24780

cost Retail cost to retail ratio beginning inventory 36103 50600 Purchase 47200 85800 less:purchase return (1800) (2800) Freight 2100 markup 9500 markup cancellation (1400) Total 83603 141700 83603/141700=.59 or 59% markdown (8600) markdown cancellation 2700 sales net of sales return [95600-1800] (93800) Ending inventory at retail 42000

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