Exercise 9-17 (Algo) Conventional and average cost retail methods; employee discounts [LO9-3, 9-4] LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2021: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts Exercise 9-17 (Algo) Part 1 Sales are recorded net of employee discounts. Beginning inventory Purchases Required: 1. Compute estimated ending inventory and cost of goods sold March applying the conventional retail method (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.) Freight-in Purchase returns Net markups Net markdowns Goods available for sale Cost Retail $ 55,000 $ 75,000 222,000 415,000 22,680 7,000 Cost-to-retail percentage (conventional retail method) Normal breakage Net sales: 9,500 7,300 5,000 9,500 295,000 1,700 Sales Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold $ Cost 55,000 $ 222,000 22.680 (7,000) 292,680 $ Retail 75,000 415,000 (9,500) 7,300 487,800 (5,000) 482,800 9,500 (295,000) (1,700) 195,600 Cost-to-Retail Ratio 60.00 %
Exercise 9-17 (Algo) Conventional and average cost retail methods; employee discounts [LO9-3, 9-4] LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2021: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts Exercise 9-17 (Algo) Part 1 Sales are recorded net of employee discounts. Beginning inventory Purchases Required: 1. Compute estimated ending inventory and cost of goods sold March applying the conventional retail method (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.) Freight-in Purchase returns Net markups Net markdowns Goods available for sale Cost Retail $ 55,000 $ 75,000 222,000 415,000 22,680 7,000 Cost-to-retail percentage (conventional retail method) Normal breakage Net sales: 9,500 7,300 5,000 9,500 295,000 1,700 Sales Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold $ Cost 55,000 $ 222,000 22.680 (7,000) 292,680 $ Retail 75,000 415,000 (9,500) 7,300 487,800 (5,000) 482,800 9,500 (295,000) (1,700) 195,600 Cost-to-Retail Ratio 60.00 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 9-17 (Algo) Conventional and average cost retail methods; employee
discounts [LO9-3, 9-4]
LeMay Department Store uses the retail inventory method to estimate ending inventory for its
monthly financial statements. The following data pertain to one of its largest departments for the
month of March 2021:
Beginning inventory
Purchases
Freight-in
Purchase returns.
Net markups
Net markdowns
Normal breakage
Net sales
Employee discounts.
Exercise 9-17 (Algo) Part 1
Sales are recorded net of employee discounts.
Beginning inventory
Purchases
Freight-in
Purchase returns
Net markups
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.
(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.)
Net markdowns
Goods available for sale
Cost
Retail
$ 55,000 $ 75,000
222,000
415,000
22,680
7,000
Normal breakage
Net sales:
Cost-to-retail percentage (conventional retail method)
Sales
Employee discounts
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
9,500
7,300
5,000
9,500
295,000
1,700
$
Cost
55,000 $
222,000
22.680
(7,000)
292,680
$
Retail
75,000
415,000
(9,500)
7,300
487,800
(5,000)
482,800
9,500
(295,000)
(1,700)
195,600
Cost-to-Retail
Ratio
60.00 %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa880cc3d-71b2-44bc-9eb8-ccb18aa2c0ed%2F2a9285ba-f2aa-49e1-9ffd-f52603feafd1%2Fsvjwml5_processed.png&w=3840&q=75)
Transcribed Image Text:Required
Exercise 9-17 (Algo) Conventional and average cost retail methods; employee
discounts [LO9-3, 9-4]
LeMay Department Store uses the retail inventory method to estimate ending inventory for its
monthly financial statements. The following data pertain to one of its largest departments for the
month of March 2021:
Beginning inventory
Purchases
Freight-in
Purchase returns.
Net markups
Net markdowns
Normal breakage
Net sales
Employee discounts.
Exercise 9-17 (Algo) Part 1
Sales are recorded net of employee discounts.
Beginning inventory
Purchases
Freight-in
Purchase returns
Net markups
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.
(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.)
Net markdowns
Goods available for sale
Cost
Retail
$ 55,000 $ 75,000
222,000
415,000
22,680
7,000
Normal breakage
Net sales:
Cost-to-retail percentage (conventional retail method)
Sales
Employee discounts
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
9,500
7,300
5,000
9,500
295,000
1,700
$
Cost
55,000 $
222,000
22.680
(7,000)
292,680
$
Retail
75,000
415,000
(9,500)
7,300
487,800
(5,000)
482,800
9,500
(295,000)
(1,700)
195,600
Cost-to-Retail
Ratio
60.00 %
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