Question

The records of Monty’s Boutique report the following data for the month of April.

Sales revenue		$106,300		Purchases (at cost)		$51,500
Sales returns		2,100		Purchases (at sales price)		88,500
Markups		10,100		Purchase returns (at cost)		2,100
Markup cancellations		1,700		Purchase returns (at sales price)		3,000
Markdowns		9,800		Beginning inventory (at cost)		17,564
Markdown cancellations		2,900		Beginning inventory (at sales price)		42,500
Freight on purchases		2,600

Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Ending inventory using conventional retail inventory method

$enter the dollar amount of the ending inventory by the conventional retail inventory method rounded to 0 decimal places

Answer 1

	Cost	Retail	Cost to Retail Ratio	Working
Beginning Inventory	$17,564	$42,500
Plus: Purchases	$49,400	$85,500		[Purchases less Returns]
Freight In	$2,600
Net Markups		$8,400		[Total – cancellation]
	$69,564	$136,400
Less: Net MarkDowns		$6,900		[Total – cancellation]
Goods Available for sale	$69,564	$129,500
Cost to retail Percentage			51.00%	( 69564 / 136400 ) x 100
Less: Net Sales		$104,200		[Sales – Sales returns]
Estimated ending inventory at retail		$25,300		$ 129500 - $ 104200
Estimated ending Inventory at cost	$12,903			$ 25300 x 51%