Question

# Blossom uses the conventional retail method to determine its ending inventory at cost. Assume the beginning...

Blossom uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were \$377000 (\$581000), purchases during the current year at cost (retail) were \$1795000 (\$3040000), freight-in on these purchases totaled \$116000, sales during the current year totaled \$2740000, and net markups (markdowns) were \$59000 (\$95000). What is the ending inventory value at cost? Hint: Round intermediate calculation to 3 decimal places, e.g. 0.635 and final answer to 0 decimal places.

a. \$547982.

b. \$845000.

c. \$525590.

d. \$597742.

 Cost Retail Cost to retail percentage Beginning inventory \$ 377,000 \$ 581,000 Add: Net Purchases \$ 1,795,000 \$ 3,040,000 Add: Freight-in \$ 116,000 Net markups \$ 59,000 \$ 2,288,000 \$ 3,680,000 62.174% [\$2,288,000/\$3,680,000] (Less): Markdowns (\$ 95,000) Goods available for sale \$ 3,585,000 Net sales (\$ 2,740,000) Estimated ending inventory at retail \$ 845,000 Estimated ending inventory at cost [\$845,000 x 62.174%] \$ 525,370

*Ending inventory at retail : \$845,000

*Ending inventory at cost : 525,370

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