Retail method3. Gibb's Department Store uses the retail inventory method.Information relating to the computation of the inventory atDecember 31, 2002, is as follows:CostP 45,000RetailP 75,000600,000590,000Inventory at January 1, 2002SalesPurchasesFreight-inMarkupsMarkdowns270,0006,75050,00020,000Estimated normal shrinkage· 2% of salesRequirements: Compute for (1) ending inventory and (2) cost ofgoods sold under the following methods:a. Average cost methodb. FIFO cost method

Inventory management is the process of procurement, storage, and disposal of raw materials, work in…

Retail method 3. Gibb's Department Store uses the retail inventory method. Information relating to the computation of the inventory at December 31, 2002, is as follows: Inventory at January 1, 2002 Sales Purchases Cost P45,000 Retail P 75,000 600,000 270 000

Retail method 3. Gibb's Department Store uses the retail inventory method. Information relating to the computation of the inventory at December 31, 2002, is as follows: Inventory at January 1, 2002 Sales Purchases Cost P45,000 Retail P 75,000 600,000 270 000

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 method
3. Gibb's Department Store uses the retail inventory method.
Information relating to the computation of the inventory at
December 31, 2002, is as follows:
Cost
P 45,000
Retail
P 75,000
600,000
590,000
Inventory at January 1, 2002
Sales
Purchases
Freight-in
Markups
Markdowns
270,000
6,750
50,000
20,000
Estimated normal shrinkage
· 2% of sales
Requirements: Compute for (1) ending inventory and (2) cost of
goods sold under the following methods:
a. Average cost method
b. FIFO cost method

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