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 2018: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts Cost Retail $ 57,000 $77,000 224,000 417,000 16,690 8,000 10,500 7,500 5,200 10,500 297,000 1,900 Sales are recorded net of employee discounts. Required: 1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method. 2. Recompute the cost-to-retail percentage using the average cost method.
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 2018: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts Cost Retail $ 57,000 $77,000 224,000 417,000 16,690 8,000 10,500 7,500 5,200 10,500 297,000 1,900 Sales are recorded net of employee discounts. Required: 1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method. 2. Recompute the cost-to-retail percentage using the average cost method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
2018:
Beginning
inventory
Purchases
Freight-in
Purchase returns.
Net markups
Net markdowns
Normal breakage
Net sales
Employee
discounts
Cost
Retail
$57,000 $77,000
224,000 417,000
16,690
8,000
10,500
7,500
5,200
10,500
297,000
1,900
Sales are recorded net of employee discounts.
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail
method.
2. Recompute the cost-to-retail percentage using the average cost method.
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