ROUND ALL PERCENTAGES TO TWO DECIMALS EX: 43.23% The following data concerning t
ID: 2543808 • Letter: R
Question
ROUND ALL PERCENTAGES TO TWO DECIMALS EX: 43.23%
The following data concerning the retail inventory method are taken from the financial records of Blake Company. Cost Retail
Beginning inventory $132,000 $ 220,000
Purchases 362,500 550,000
Freight-in 16,000 —
Net markups — 45,000
Net markdowns — 16,000
Sales — 625,000
1. What is the ending inventory at retail?
2. If the ending inventory is to be valued at approximately the conventional retail inventory method, the calculation of the cost to retail ratio should be based on goods available for sale at: (a) cost(dollar amount) and (b) retail(dollar amount)
3. What is the cost of ending inventory using the FIFO cost method?
4. What is the cost of ending inventory using the LIFO Retail Method?
Explanation / Answer
Cost to retail ratio=494500/770000=49.00%
2. Ending Inventory Cost at Retail=188250
Cost to retail ratio=494500/770000=49.00%
3. Cost of Ending Inventory Using FIFO Cost Method=
Opening Inventory Used=132000
Reemining will be used from Purchases=(306250-132000)=174250
Clsoing Inventory=494500-174250-132000=188250
4. Cost of Ending Inventory Using LIFO Retail Method=
Total retail Inventory Used=770000*49%=377300
Remaining Inventory from Purchases=(550000-377300)=172700
Clsoing Inventory=172700+220000=392700
1 Calculation of Ending Inventory at Retail=Cost to retail ratio=494500/770000=49.00%
Beginning inventory 132000 (At cost) Purchases + 362500 (At cost) Goods available for sale = 494500 Sales - 306250 (Sales of 625000 x 49%) Ending inventory $188250Related Questions
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