n inventory method which is designed to approximat inventory valuation at the lo

Question

n inventory method which is designed to approximat inventory valuation at the lower of cost or market is A) last-in, first-out. B) first-in, first-out. C) conventional retail method. D) specific identification. 17. A 18. To produce an inventory valuation which approximates lower of cost or market using the conventional retail inventory method, the computation of the ratio of cost to retail should A) include markups but not markdowns. B) include markups and markdowns. C) ignore both markups and markdowns. D) include markdowns but not markups 19. The following information is available for October for Norton Company. Beginning inventory $400,000 Net purchases Net sales Percentage markup on 66.67% cost A fire destroyed Norton's October 31 inventory, leaving undamaged inventory with a cost of S24,000. Using the gross profit method, the estimated ending inventory destroyed by fire is A) $136,000. B) $616,000 C) $640,000. D) $800,000. 1,200,000 2,400,000 Page 8

Explanation / Answer

1) Solution: conventional retail method

Explanation: conventional retail method includes markups but excludes markdowns designed to approximates the inventory at lower of cost

2) Solution: include markups but not markdowns

Explanation: conventional retail method includes markups but excludes markdowns

3) Solution: $136,000

Working: (400,000 + 12,00,000) - (2,400,000 / (5/3) ) - 24,000 = $136,000

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

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