Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year: Cost Retail Inventory, January 1 $35,000 $70,000 Purchases 140,000 244,614 Markups (net) — 5,000 Markdowns (net) — 4,000 Sales — 180,000 Instructions: 1. Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodFIFO Cost Retail $- Select - $- Select - - Select - - Select - - Select - - Select - $fill in the blank 9edac0f9300ffd0_10 fill in the blank 9edac0f9300ffd0_11 Cost-to-retail ratio: fill in the blank 9edac0f9300ffd0_12 - Select - - Select - $- Select - $- Select - - Select - - Select - $- Select - $- Select - 2. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Average cost. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodAverage Cost Cost Retail $- Select - $- Select - - Select - - Select - - Select - - Select - - Select - - Select - $- Select - $- Select - Cost-to-retail ratio fill in the blank 0528b6f44ffef90_16 - Select - - Select - $- Select - $- Select - 3. Compute the ending inventory by the retail inventory method for the following cost flow assumption: LIFO. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodLIFO Cost Retail $- Select - $- Select - Cost-to-retail ratio fill in the blank e72d46086f92fd8_4 - Select - - Select - - Select - $- Select - - Select - - Select - $- Select - $- Select - Cost-to-retail ratio fill in the blank e72d46086f92fd8_17 - Select - - Select - $- Select - $- Select -

Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year: Cost Retail Inventory, January 1 $35,000 $70,000 Purchases 140,000 244,614 Markups (net) — 5,000 Markdowns (net) — 4,000 Sales — 180,000 Instructions: 1. Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodFIFO Cost Retail $- Select - $- Select - - Select - - Select - - Select - - Select - $fill in the blank 9edac0f9300ffd0_10 fill in the blank 9edac0f9300ffd0_11 Cost-to-retail ratio: fill in the blank 9edac0f9300ffd0_12 - Select - - Select - $- Select - $- Select - - Select - - Select - $- Select - $- Select - 2. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Average cost. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodAverage Cost Cost Retail $- Select - $- Select - - Select - - Select - - Select - - Select - - Select - - Select - $- Select - $- Select - Cost-to-retail ratio fill in the blank 0528b6f44ffef90_16 - Select - - Select - $- Select - $- Select - 3. Compute the ending inventory by the retail inventory method for the following cost flow assumption: LIFO. Round the cost-to-retail ratio to three decimal places. HARMES COMPANYCalculation of ending inventory by retail inventory methodLIFO Cost Retail $- Select - $- Select - Cost-to-retail ratio fill in the blank e72d46086f92fd8_4 - Select - - Select - - Select - $- Select - - Select - - Select - $- Select - $- Select - Cost-to-retail ratio fill in the blank e72d46086f92fd8_17 - Select - - Select - $- Select - $- Select -

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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Question

Retail Inventory Method

Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year:

	Cost	Retail
Inventory, January 1	$35,000	$70,000
Purchases	140,000	244,614
Markups (net)	—	5,000
Markdowns (net)	—	4,000
Sales	—	180,000

Instructions:

1. Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO. Round the cost-to-retail ratio to three decimal places.

HARMES COMPANYCalculation of ending inventory by retail inventory methodFIFO

		Cost	Retail
		$- Select -	$- Select -
		- Select -	- Select -
		- Select -	- Select -
		$fill in the blank 9edac0f9300ffd0_10	fill in the blank 9edac0f9300ffd0_11
Cost-to-retail ratio:	fill in the blank 9edac0f9300ffd0_12
		- Select -	- Select -
		$- Select -	$- Select -
		- Select -	- Select -
		$- Select -	$- Select -

2. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Average cost. Round the cost-to-retail ratio to three decimal places.

HARMES COMPANYCalculation of ending inventory by retail inventory methodAverage Cost

		Cost	Retail
		$- Select -	$- Select -
		- Select -	- Select -
		- Select -	- Select -
		- Select -	- Select -
		$- Select -	$- Select -
Cost-to-retail ratio	fill in the blank 0528b6f44ffef90_16
		- Select -	- Select -
		$- Select -	$- Select -

3. Compute the ending inventory by the retail inventory method for the following cost flow assumption: LIFO. Round the cost-to-retail ratio to three decimal places.

HARMES COMPANYCalculation of ending inventory by retail inventory methodLIFO

		Cost	Retail
		$- Select -	$- Select -
Cost-to-retail ratio	fill in the blank e72d46086f92fd8_4
		- Select -	- Select -
		- Select -	$- Select -
		- Select -	- Select -
		$- Select -	$- Select -
Cost-to-retail ratio	fill in the blank e72d46086f92fd8_17
		- Select -	- Select -
		$- Select -	$- Select -

4. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Lower of cost or market (based on average cost). Round the cost-to-retail ratio to three decimal places.

HARMES COMPANYCalculation of ending inventory by retail inventory methodLower of Cost or Market (based on average cost)

		Cost	Retail
		$- Select -	$- Select -
		- Select -	- Select -
		- Select -	- Select -
		$fill in the blank fa4433f90067014_10	$fill in the blank fa4433f90067014_11
Cost-to-retail ratio	fill in the blank fa4433f90067014_12
		- Select -	- Select -
		$- Select -	$- Select -
		- Select -	- Select -
		$- Select -	$- Select -

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