Carmela Company used the conservative retail inventory method. The following information relating to the inventory was gathered at year-end: Cost Retail Beginning inventory 530,000 900,000 Purchases 6,080,000 8,700,000 Purchase discounts 85,000 Freight in 105,000 Markups 600,000 Markdowns 800,000 Sales 8,600,000 Sales discounts 100,000 What is the ending inventory at year-end?

Carmela Company used the conservative retail inventory method. The following information relating to the inventory was gathered at year-end: Cost Retail Beginning inventory 530,000 900,000 Purchases 6,080,000 8,700,000 Purchase discounts 85,000 Freight in 105,000 Markups 600,000 Markdowns 800,000 Sales 8,600,000 Sales discounts 100,000 What is the ending inventory at year-end?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Kiddie World uses a periodic inventory system and the retail Inventory method to estimate ending inventory and cost of goods sold. The following data are available at the end of the year. Beginning inventory Net purchases Freight-in Net markups Net markdowns Net sales Cost $ 380,000 895,000 68,200 Beginning inventory Plus. Net purchases Freight-in Net markups Goods available for sale Less: Net markdowns Goods available for sale Cost-to-retail percentage Less: Net sales Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Retail $ 520,000 1,290,000 Estimate ending Inventory and cost of goods sold using the conventional method. Note: Round ratio calculation to 2 decimal places (1.e., 0.1234 should be entered as 12.34%.) $ 56,000 26,000 1,240,000 Cost 380,000 $ 895,000 68,200 1,343,200 $ Retail 520,000 1,290,000 56,000 1,866,000 (26,000) 1,840,000 (1,240,000) 600,000 Cost to Retail Ratio 4
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The Brad's Farm Company uses the retail inventory method to compute ending inventory. Information for last year is as follows: Cost Retail Beginning inventory $12,000 $20,000 Net markups 8,000 Purchases 40,000 80,000 Freight-in 7,100 Purchase returns 3,000 6,000 Sales 50,000 Net markdowns 4,000 Required: Determine Brad’s Farm Company's ending inventory based on the retail lower of average cost or market method.