The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January. Inventory, January 1: at retail $25,000; at cost $17,000 Purchases in January: at retail $137,000; at cost $82,500 Freight-in: $7,000 Purchase returns: at retail $3,000; at cost $2,300 Transfers in from suburban branch: at retail $13,000; at cost $9,200 Net markups: $8,000 Net markdowns: $4,000 Inventory losses due to normal breakage, etc.: at retail $400 Sales revenue at retail: $95,000 Sales returns: $2,400 Instructions a. Compute the inventory for this department as of January 31, at retail prices. b. Compute the ending inventory using lower-of-average-cost-or-market.
The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January. Inventory, January 1: at retail $25,000; at cost $17,000 Purchases in January: at retail $137,000; at cost $82,500 Freight-in: $7,000 Purchase returns: at retail $3,000; at cost $2,300 Transfers in from suburban branch: at retail $13,000; at cost $9,200 Net markups: $8,000 Net markdowns: $4,000 Inventory losses due to normal breakage, etc.: at retail $400 Sales revenue at retail: $95,000 Sales returns: $2,400 Instructions a. Compute the inventory for this department as of January 31, at retail prices. b. Compute the ending inventory using lower-of-average-cost-or-market.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The records for the Clothing Department of Sharapova’s Discount Store are summarized below for the month of January.
- Inventory, January 1: at retail $25,000; at cost $17,000
- Purchases in January: at retail $137,000; at cost $82,500
- Freight-in: $7,000
- Purchase returns: at retail $3,000; at cost $2,300
- Transfers in from suburban branch: at retail $13,000; at cost $9,200
- Net markups: $8,000
- Net markdowns: $4,000
- Inventory losses due to normal breakage, etc.: at retail $400
- Sales revenue at retail: $95,000
- Sales returns: $2,400
Instructions
a. Compute the inventory for this department as of January 31, at retail prices.
b. Compute the ending inventory using lower-of-average-cost-or-market.
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