P6.11 # Retail Inventory Method: Estimating Monthly Ending Inventories## OverviewRayre Books employs the retail inventory method to estimate its monthly ending inventories. The following data is available for two of its departments as of October 31, 2020: Hardcovers and Paperbacks.### Department Data#### Hardcovers- **Cost Details:** - Beginning Inventory: $420,000 - Purchases: $2,135,000 - Freight-in: $24,000 - Purchase Discounts: $44,000- **Retail Details:** - Beginning Inventory: $640,000 - Purchases: $3,200,000 - Net Sales: $3,100,000 #### Paperbacks- **Cost Details:** - Beginning Inventory: $280,000 - Purchases: $1,155,000 - Freight-in: $12,000 - Purchase Discounts: $0- **Retail Details:** - Beginning Inventory: $360,000 - Purchases: $1,540,000 - Net Sales: $1,570,000 ### Physical Inventory (December 31)- Hardcovers: $744,000 (retail value)- Paperbacks: $335,000 (retail value)### Instructions**a. Determine the estimated cost of the ending inventory for each department at October 31, 2020, using the retail inventory method.****b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks.**### Solution Highlight- **a. Hardcover Estimation:** - Ending Inventory: Cost-based estimate at October 31, 2020, is **$488,400**.---This example illustrates applying the retail inventory method to determine the cost estimates and analyze inventory levels efficiently. Understanding cost-to-retail ratios is crucial for accurate inventory valuation in retail settings.

The ending inventory is calculated as the difference between the cost of goods available for sale…

Compute ending inventory using retail P6.11A (LO 6) Rayre Books uses the retail inventory method to estimate its monthly ending inventories. method. The following information is available for two of its departments at October 31, 2020. Hardcovers Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 3,100,000 Paperbacks Cost $ 280,000 1,155,000 12,000 22,000 Retail $ 360,000 1,540,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000.

Compute ending inventory using retail P6.11A (LO 6) Rayre Books uses the retail inventory method to estimate its monthly ending inventories. method. The following information is available for two of its departments at October 31, 2020. Hardcovers Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 3,100,000 Paperbacks Cost $ 280,000 1,155,000 12,000 22,000 Retail $ 360,000 1,540,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Explain what is included in Form 10-Q and why is it needed.
Fans Company has two service departments-product design and engineering support, and two production departments - assembly and finishing. The distribution of each service department's efforts to the other departments is shown below: Design SERVICE DEPARTMENT Product Design 0% Engineering Support 20% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Product Design Engineering Support Assembly Finishing Multiple Choice $1,863,265 SERVICES PROVIDED TO Support 10% 0% $623,878 $1,036,122 Assembly 30% 45% $100,000 $ 200,000 $540,000 $ 820,000 The total cost accumulated in the assembly department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar) Finishing 60% 35% D
For what purpose Form 2553 is required?
What Is Section 1031? A brief explanation on this?
Other than 1040, what other forms need to be completed?
E14.7
E14.2
Hansen Corporation. a C Corporation (mot a manufacturer) reports the following items in income and expenses for 2021 Gross Revenue $900,000 Dividend Received from 30% owned Corp 200,000 LTCG 30,000 STCL 12000 City of Lee's Summit Bond Interest 10000 COGS 375000 Administrative Expenses 325000 Charitable Contribution 60,000 Compute Hansen's C Corp Taxable income?
What is covered by Regulation S–K?
1.General information about IAS200. 2.What means of reasonable assurance? 3.Explain ISA200 requirement
defines the concept of globalization
Explain IAS39