A company uses the retail method to value its inventory. The following information is available for the year: Beginning inventory Purchases Cost $ 260,000 693,000 15,000 Retail $ 287,000 896,000 Freight-in Net markups Net markdowns Net sales Required: 27,000 4,700 870,000 Determine ending inventory and cost of goods sold by applying the conventional retail method using the information provided. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign. Cost Retail Cost-to-Retail Ratio Beginning inventory Purchases Freight-in Net markups $ 260,000 $ 287,000 693,000 896,000 15,000 27,000 1,210,000 Net markdowns (4,700) Goods available for sale 968,000 1,205,300 Cost-to-retail percentage 80.00 % Net sales (870,000) Estimated ending inventory at retail $ 335,300 Estimated ending inventory at cost Estimated cost of goods sold 268,240
A company uses the retail method to value its inventory. The following information is available for the year: Beginning inventory Purchases Cost $ 260,000 693,000 15,000 Retail $ 287,000 896,000 Freight-in Net markups Net markdowns Net sales Required: 27,000 4,700 870,000 Determine ending inventory and cost of goods sold by applying the conventional retail method using the information provided. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign. Cost Retail Cost-to-Retail Ratio Beginning inventory Purchases Freight-in Net markups $ 260,000 $ 287,000 693,000 896,000 15,000 27,000 1,210,000 Net markdowns (4,700) Goods available for sale 968,000 1,205,300 Cost-to-retail percentage 80.00 % Net sales (870,000) Estimated ending inventory at retail $ 335,300 Estimated ending inventory at cost Estimated cost of goods sold 268,240
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Dineshbhai
Transcribed Image Text:A company uses the retail method to value its inventory. The following information is available for the year:
Beginning inventory
Purchases
Cost
$ 260,000
693,000
15,000
Retail
$ 287,000
896,000
Freight-in
Net markups
Net markdowns
Net sales
Required:
27,000
4,700
870,000
Determine ending inventory and cost of goods sold by applying the conventional retail method using the information provided.
Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a
minus sign.
Cost
Retail
Cost-to-Retail
Ratio
Beginning inventory
Purchases
Freight-in
Net markups
$
260,000
$
287,000
693,000
896,000
15,000
27,000
1,210,000
Net markdowns
(4,700)
Goods available for sale
968,000
1,205,300
Cost-to-retail percentage
80.00 %
Net sales
(870,000)
Estimated ending inventory at retail
$
335,300
Estimated ending inventory at cost
Estimated cost of goods sold
268,240
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education