Question

# Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the...

 Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

 Cost Retail Beginning inventory \$48,000 \$63,000 Net purchases 153,000 215,000 Net markups 22,000 Net markdowns 35,000 Net sales 221,000

 To the nearest thousand, estimated ending inventory using the conventional retail method is (Do not round intermediate calculations):

Multiple Choice

• \$37,000.

• \$29,000.

• \$31,000.

• \$35,000.

Explanation:

 Particulars Cost(\$) Retail(\$) Beginning Inventory 48,000 63,000 Add:Net Purchases 153,000 215,000 201,000 278,000 Add:Net Markups - 22,000 Totals 201,000 300,000 Deduct:Net Markdowns - -35000 Sale Price of goods Available 265,000 Deduct: Sales Revenue 221,000 Ending Inventory at Retail 44,000 Cost to Retail Ratio 67.00% 201000/300000 Ending Inventory at Cost 29480 44000*0.67

To the nearest thousand 29480=29,000 (Rounded off to nearest Thousand)

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