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: Cost RetailBeginning inventory $ 40,000 $ 60,000Purchases 207,000 400,000Freight-in 14,488Purchase returns 4,000 6,000Net markups 5,800Net markdowns 3,500Normal breakage 6,000Net sales 280,000Employee discounts 1,800 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 2021:
Cost Retail
Beginning inventory $ 40,000 $ 60,000
Purchases 207,000 400,000
Freight-in 14,488
Purchase returns 4,000 6,000
Net markups 5,800
Net markdowns 3,500
Normal breakage 6,000
Net sales 280,000
Employee discounts 1,800
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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