The records of Concord’s Boutique report the following data for the month of Apr
ID: 2582694 • Letter: T
Question
The records of Concord’s Boutique report the following data for the month of April.
Sales revenue $91,200 Purchases (at cost) $45,400
Sales returns 1,900 Purchases (at sales price) 92,100
Markups 10,000 Purchase returns (at cost) 1,900
Markup cancellations 1,300 Purchase returns (at sales price) 3,000
Markdowns 9,200 Beginning inventory (at cost) 36,560
Markdown cancellations 2,600 Beginning inventory (at sales price) 44,200
Freight on purchases 2,300
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
Cost Retail
Beginning Inventory 36560 44200
Purchases 45400 92100
Purchases Returns (1900) (3000)
Freight on Purchase 2300
Total 82360 133300
Add: Net markups:
Mark ups 10000
Mark ups cancellation (1300) 8700
82360 142000
Deduct: Net markdowns
Mark downs 9200
Mark downs cancellations (2600)
Net Mark downs 6600
Sales price of goods available 135400
Deduct: Net Sales (91200 - 1900) 89300
Ending Inventory @ Retail 46100
Cost to Retail Ratio = 82360/142000 = 58%
Ending Inventory at coat = 58% x 46100 = $ 26738
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