Compute the ending inventory using lower-of-average-cost-or-market. (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 at Lower-of-Average-Cost-Or-Market $ ____________ **Summary of Clothing Department Records for Novak’s Discount Store - January**- **Inventory, January 1:** - At retail: $25,000 - At cost: $16,900 - **Purchases in January:** - At retail: $138,000 - At cost: $92,444 - **Freight-in:** $6,900 - **Purchase Returns:** - At retail: $3,000 - At cost: $2,300 - **Transfers in from Suburban Branch:** - At retail: $13,000 - At cost: $9,000 - **Net Markups:** $7,800 - **Net Markdowns:** $4,000 - **Inventory Losses Due to Normal Breakage, etc.:** - At retail: $300 - **Sales Revenue at Retail:** $93,100 - **Sales Returns:** $2,400 **Title: Calculating Ending Inventory at Retail****Instructions:**To compute the inventory for this department as of January 31 at retail prices, refer to the following value:- **Ending Inventory at Retail:** $85,800This amount represents the total retail value of inventory on hand at the end of the period. It's essential for managing stock levels and financial reporting within the department. Adjustments or calculations often follow to determine inventory cost using a method like the retail inventory method or other valuation techniques, depending on the accounting needs.

Solution:- Calculation of the ending inventory using lower-of-average-cost-or-market as follows:- Working note:- Cost to retail ratio =$122,944/$173,000 x 100 =71% Particulars Cost Workings Retail Beginning inventory $ 16,900 $ 25,000 Purchases $ 92,444 $ 1,38,000 Freight $ 6,900 Purchase returns $ -2,300 $ -3,000 Transfers $ 9,000 $ 13,000 Total $ 1,22,944 $ 1,73,000 Markup $ 7,800 Total $ 1,80,800 Markdown $ -4,000 Sales $ 93,100 Sales return $ -2,400 $ -90,700 Inventory losses $ -300 Ending inventory $ 85,800Calculation of ending inventory using lower-of-average-cost-or-market as follows:- Ending Inventory = Retail ending inventory X Cost to retail ratio = $85,300 X 71% = $60,563 I hope helpful to you.. Thank you..

Business

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Compute the ending inventory using lower-of-average-cost-or-market. (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 at Lower-of-Average-Cost-Or-Market

Compute the ending inventory using lower-of-average-cost-or-market. (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 at Lower-of-Average-Cost-Or-Market

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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What is the ending inventory value?