s Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financialstatements. The following data pertain to a single department for the month of October:Beginning inventory:At costAt retail)Purchases (exclusive of freight and returns):At costAt retailFreight-inPurchase returns:At costAt retailAdditional markupsMarkup cancellations.Markdowns (net)Normal spoilage and breakageSalesSales returnsBeginning inventoryGoods available for saleCost-to-retail percentageRequired:1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM)inventory and cost of goods sold for October.Goods available for sale$ 25,00035,000Note: Round your cost-to-retail percentage to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and round your finalanswers to the nearest whole dollar.Less: Net Sales98,108151,5005,600Estimated ending inventory at retailEstimated ending inventory at costEstimated cost of goods sold2,6003,3003,0002008505,000144,5003,770CostRetail0Cost-to-RetailRatio

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Description: s Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financialstatements. The following data pertain to a single department for the month of October:Beginning inventory:At costAt retail

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Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Beginning inventory: At cost At retail Purchases (exclusive of freight and returns): At cost At retail Freight-in Purchase returns: At cost At retail. Additional markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales Sales returns Beginning inventory Goods available for sale Cost-to-retail percentage Goods available for sale Less: Net Sales $ 25,000 35,000 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold 98,108 151,500 5,600 Required: 1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM) inventory and cost of goods sold for October. Note: Round your cost-to-retail percentage to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and round your final answers to the nearest whole dollar. 2,600 3,300 3,000 200 850 5,000 144,500 3,770 Cost Retail 0 Cost-to-Retail Ratio

Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Beginning inventory: At cost At retail Purchases (exclusive of freight and returns): At cost At retail Freight-in Purchase returns: At cost At retail. Additional markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales Sales returns Beginning inventory Goods available for sale Cost-to-retail percentage Goods available for sale Less: Net Sales $ 25,000 35,000 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold 98,108 151,500 5,600 Required: 1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM) inventory and cost of goods sold for October. Note: Round your cost-to-retail percentage to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and round your final answers to the nearest whole dollar. 2,600 3,300 3,000 200 850 5,000 144,500 3,770 Cost Retail 0 Cost-to-Retail Ratio

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Grand Department Store, Incorporated, uses the retail inventory method to estimate ending inventory for its monthly financial
statements. The following data pertain to a single department for the month of October:
Beginning inventory:
At cost
At retail)
Purchases (exclusive of freight and returns):
At cost
At retail
Freight-in
Purchase returns:
At cost
At retail
Additional markups
Markup cancellations.
Markdowns (net)
Normal spoilage and breakage
Sales
Sales returns
Beginning inventory
Goods available for sale
Cost-to-retail percentage
Required:
1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM)
inventory and cost of goods sold for October.
Goods available for sale
$ 25,000
35,000
Note: Round your cost-to-retail percentage to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and round your final
answers to the nearest whole dollar.
Less: Net Sales
98,108
151,500
5,600
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
2,600
3,300
3,000
200
850
5,000
144,500
3,770
Cost
Retail
0
Cost-to-Retail
Ratio

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