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*P6.11 (LO 6), AP Rayre Books uses the retail inventory method to estimate its monthly ending invento- ries. The following information is available for two of its departments at October 31, 2022. Hardcovers Paperbacks Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 Cost $ 280,000 1,155,000 12,000 22,000 Retail $360,000 1,540,000 3,100,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to- retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks.

*P6.11 (LO 6), AP Rayre Books uses the retail inventory method to estimate its monthly ending invento- ries. The following information is available for two of its departments at October 31, 2022. Hardcovers Paperbacks Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 Cost $ 280,000 1,155,000 12,000 22,000 Retail $360,000 1,540,000 3,100,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to- retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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*P6.11 (LO 6), AP Rayre Books uses the retail inventory method to estimate its monthly ending invento- ries. The following information is available for two of its departments at October 31, 2022. Hardcovers Paperbacks Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 Cost $ 280,000 1,155,000 12,000 22,000 Retail $360,000 1,540,000 1,570,000 3,100,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to- retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks. Compute ending inventory using retail method. a. Hardcovers: End. Inv. $488,400
Transcribed Image Text:*P6.11 (LO 6), AP Rayre Books uses the retail inventory method to estimate its monthly ending invento- ries. The following information is available for two of its departments at October 31, 2022. Hardcovers Paperbacks Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 Cost $ 280,000 1,155,000 12,000 22,000 Retail $360,000 1,540,000 1,570,000 3,100,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to- retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks. Compute ending inventory using retail method. a. Hardcovers: End. Inv. $488,400
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