Question

Ivanhoe Corporation had the following amounts, all at retail: Beginning inventory $ 3800 Purchases $ 147000...

Ivanhoe Corporation had the following amounts, all at retail:

Beginning inventory

$ 3800

Purchases

$ 147000

Purchase returns

6200

Net markups

19000

Abnormal shortage

4200

Net markdowns

3000

Sales revenue

79000

Sales returns

1900

Employee discounts

1700

Normal shortage

2700


What is Ivanhoe’s ending inventory at retail using the conventional retail method?

$76600.

$74900.

$78300.

$79100.

Homework Answers

Answer #1

Answer:

  • The correct answer is $ 74,900 (Ivanhoe’s ending inventory at retail ).

Explanation:

Compute Ivanhoe’s ending inventory at retail using the conventional retail method in the following way:

Particulars Amount Amount
Beginning inventory $ 3,800
Purchases $ 1,47,000
Purchases returns -$ 6,200
= $ 1,47,000-$ 6,200 = $ 1,40,800 $1,40,800
Sales revenue - $ 79,000
Sales returns $ 1,900
= -$ 79,000+$ 1,900 = - $ 77,100 - $77,100
Net markups $ 19,000
Net markdowns -$ 3000
Abnormal shortage -$ 4,200
Normal shortage -$ 2,700
Employee discounts -$ 1,700
= - $ 3,000 - $ 4,200 - $ 2,700 - $ 1,700 = - $ 11,600 - $ 11,600
Ivanhoe’s ending inventory at retail $ 74,900
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