### Inventory and Cost-to-Retail Analysis**Inventory, October 1, 2021:**- **At cost:** $30,000- **At retail:** $40,000**Purchases (exclusive of freight and returns):**- **At cost:** $113,510- **At retail:** $156,500**Freight-in:** $6,100**Purchase Returns:**- **At cost:** $3,100- **At retail:** $3,800**Additional Markups:** $3,500**Markup Cancellations:** $200**Markdowns (net):** $900**Normal Spoilage and Breakage:** $5,500**Sales:** $149,000**Sales Returns:** $3,270---#### Required:1. **Objective:** Using the conventional retail method, prepare a schedule to compute the estimated lower of cost or market (LCM) inventory for October 31, 2021. *(Round your cost-to-retail percentage to 2 decimal places and round your final answers to the nearest whole dollar.)*### Schedule:| Cost | Retail | Cost-to-Retail Ratio ||------|--------|-----------------------|| **Beginning Inventory** | $30,000 | $40,000 || **Add: Purchases** | $113,510 | $156,500 || **Add: Freight-in** | $6,100 | || **Less: Purchase Returns** | $3,100 | $3,800 || | | || **Add: Net Markups** | | $3,300 || | | || **Goods Available for Sale (excluding net markdowns)** | $146,510 | $196,000 || **Cost-to-retail percentage** | | **74.75%** || **Less: Net Markdowns** | | $900 || | | || **Goods Available for Sale (including net markdowns)** | | $195,100 || **Less: Normal Spoilage** | | $5,500 || **Less: Sales** | | $149,000 || **Less: Sales Returns** | | $3,270 || | | || **Estimated Ending Inventory at Retail** | | $145,730 || **Estimated Ending Inventory at Cost** | | |**Graphs/Diagrams**:-

Inventory, October 1, 2021: 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 Add: Purchases Add: Freight-in Less: Purchase returns Add: Net markups Goods available for sale (excluding net markdowns) Cost-to-retail percentage Less: Net markdowns Goods available for sale (including net markdowns) Less: Normal spoilage Less: Sales Less: Sales returns Required: 1. Using the conventional retail method, prepare a schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2021. (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.) Estimated ending inventory at retail Estimated ending inventory at cost 15.5 S $ Cost 30,000 40,000 113,510 156,500 6,100 146,510 3,100 3,800 3,500 200 900 5,500 149,000 3,270 30,000 $ 113,510 6,100 3,100 $ Retail 40,000 156,500 3,800 3,300 196,000 900 195,100 5,500 $ 149,000 3,270 145,730 Cost-to-Retail Ratio 74.75%

Inventory, October 1, 2021: 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 Add: Purchases Add: Freight-in Less: Purchase returns Add: Net markups Goods available for sale (excluding net markdowns) Cost-to-retail percentage Less: Net markdowns Goods available for sale (including net markdowns) Less: Normal spoilage Less: Sales Less: Sales returns Required: 1. Using the conventional retail method, prepare a schedule computing estimated lower of cost or market (LCM) inventory for October 31, 2021. (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.) Estimated ending inventory at retail Estimated ending inventory at cost 15.5 S $ Cost 30,000 40,000 113,510 156,500 6,100 146,510 3,100 3,800 3,500 200 900 5,500 149,000 3,270 30,000 $ 113,510 6,100 3,100 $ Retail 40,000 156,500 3,800 3,300 196,000 900 195,100 5,500 $ 149,000 3,270 145,730 Cost-to-Retail Ratio 74.75%

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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Q29
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I computed 72,540 but is checked wrong why?
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