Question

Presented below is information related to Whispering Company. Cost Retail Beginning inventory $318,504 $279,000 Purchases 1,363,000 2,117,000 Markups 93,200 Markup cancellations 16,400 Markdowns 38,300 Markdown cancellations 5,500 Sales revenue 2,158,000 Compute the 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 $

Answer 1

	Cost		Retail
Beginning inventory	318504		279000
Purchases	13,63,000		21,17,000
Totals	16,81,504		23,96,000
Add: Net markups
Markups		93200
Markup cancellations	_________	-16,400	76,800
Totals	16,81,504		24,72,800
Deduct: Net markdowns
Markdowns		38,300
Markdowns cancellations		-5,500	32,800
Sales price of goods available			24,40,000
Deduct: Sales			21,58,000
Ending inventory at retail			2,82,000
Cost to Retail ratio = 1681504/2472800=	68%
Ending inventory at cost = 282000*68%=	$191,760