uses the conventional retail method to determine its er ding inventory at cost.

Question

uses the conventional retail method to determine its er ding inventory at cost. Assume the beginning inventory at cost (retail) were $390,000 (S594,000, purchases during the current year at cost (retail) were $2,055,000 (S3,300,000, freight-in on these purchases totaled $129,000, sales during the current year totaled $3,000,000, and net markups (markdowns) were $72,000 (S108,000). What is the ending inventory value at cost? A) $556,842. B) $567,138. C) S580,206. D) $858,000. e following data concerning the retail inventory method are taken from the financial records of Welch Company. 23. Th Cost Retail Beginning inventory S S 280,000 196,000 Purchases Freight-in Net markups Net markdowns Sales 896,000 1,280,000 80,000 56,000 -1,334,000 24,000 The ending inventory at retail should be A) $296,000. B) $240,000. C) $256,000. D) $168,000. Page 10

Explanation / Answer

22)

Ending inventory at cost : 858000*.6490= 556842

correct option is "A"

23)Ending inventory at retail =Beginning+purchase+markup-markdown -sales

= 280000+1280000+80000-56000-1334000

= 250000

**None of option is correct.

cost Retail Beginning 390000 594000 Purchase 2055000 3300000 Freight in 129000 Mark up 72000 cost of goods available for sale 2574000 3966000 2574000/3966000= 64.90% LesS:markdown -108000 sales -3000000 Ending inventory at retail 858000

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