E connect Question o Adams Corportin uses a penodic nventory system and the reta

Question

E connect Question o Adams Corportin uses a penodic nventory system and the retail inventory method to estimate andng muerteryarnd cost d gods sad The trlomg dta aaitie for the month of September 2016 Cost Reta 24 800 37 200 12.400 et matkup 8 500 1500 et sales company uned the average cost flow method and estimated nventory at the end of September be $22 200 00 I have been 50% the company had used the LIFO cost new method ttw costso-retai percentage would Compute net purchases at netal and net sales for the moth of Septemter Net sles TOSHIBA 2 3 4 5 6 tab

Explanation / Answer

PART-1) Net purchases at retail = $17,800

Working:

Working

Particulars

Amount $

Goods available at retail

24800

12400*100/50

Less Markups

-8500

Add marks down

1500

Net purchases at retail

17800

PART-2) Net sales = $25,000

Working:

Particulars

Cost $

Retail $

Beginning Inventory

24,800

37,200

Add purchases

12,400

17,800

Add net markup

8,500

Less net markdown

-1,500

37,200

62,000

Net sales

25,000

Ending Inventory

37,000

Cost to retail % = 37200/ 62000 = 0.6 = 60%

Estimated Inventory at Retail = Ending Inventory / .06 = 22,200 / 0.06 = 37,000

Working

Particulars

Amount $

Goods available at retail

24800

12400*100/50

Less Markups

-8500

Add marks down

1500

Net purchases at retail

17800

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