Retail inventory method : It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail. To prepare: a report to the president explaining about the retail method of estimating inventories.

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PARRISH 7-11 RECORDING INVENTORY WITH DISCOUNTS AVAILABLE NET/GROSS PLEASE READ BELOW AND SOLVE THE FOLLOWING a) and b) questions ***Please answer accurately and thoroughly^*** As a consultant, you specialize in helping companies decide which accounting method to use. Your client Megabucks Company, has just started business. The owners want to know how to use the gross and net methods to record purchases. Megabucks also wants to know which method is best to use. Megabucks uses the Periodic system. a) Prepare the journal entries under the gross and net methods for the following situtations 10/3 Purchased and received $10000 of merchandise terms 2/10, n/30 10/6 Returned defective mechandise with cost of $600 10/12 Paid $8000 of the merchandise 11/1 Paid for the remainder of the merchandise b) Describe which method has the most information for management and why that method is more informative

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Chapter 9, Problem 9.5BYP

To determine

Retail inventory method: It takes into account all the retail amounts that is, the current selling prices. Under this method, the goods available for sale, at retail is deducted from the sales, at retail to determine the ending inventory, at retail.

To prepare: a report to the president explaining about the retail method of estimating inventories.

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PARRISH 7-11 RECORDING INVENTORY WITH DISCOUNTS AVAILABLE NET/GROSS PLEASE READ BELOW AND SOLVE THE FOLLOWING a) and b) questions ***Please answer accurately and thoroughly^*** As a consultant, you specialize in helping companies decide which accounting method to use. Your client Megabucks Company, has just started business. The owners want to know how to use the gross and net methods to record purchases. Megabucks also wants to know which method is best to use. Megabucks uses the Periodic system. a) Prepare the journal entries under the gross and net methods for the following situtations 10/3 Purchased and received $10000 of merchandise terms 2/10, n/30 10/6 Returned defective mechandise with cost of $600 10/12 Paid $8000 of the merchandise 11/1 Paid for the remainder of the merchandise b) Describe which method has the most information for management and why that method is more informative

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Part 1 On 12 February, the business premises of World Gamers Ltd was destroyed by flood waters. The insurance company asked the Owner to prove the inventory loss experienced by the flood. Records salvaged by the system identified beginning inventory was $128,000, net sales up to 12 February totalled $430,300. The owner ensured that inventory was marked up to allow a gross profit of 45%. Net purchases totalled $364,600 and freight inwards amounted to $5,900. Required: Using the Retail Inventory method, determine the amount of World Gamers Ltd claim for the inventory loss by calculating: (a) the cost of goods available for sale (b) the estimated cost of sales (c) the estimated inventory lost by fire.