Question

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

Sales revenue		$107,500		Purchases (at cost)		$50,800
Sales returns		1,900		Purchases (at sales price)		84,200
Markups		10,800		Purchase returns (at cost)		1,900
Markup cancellations		1,400		Purchase returns (at sales price)		2,800
Markdowns		9,900		Beginning inventory (at cost)		26,304
Markdown cancellations		2,600		Beginning inventory (at sales price)		43,000
Freight on purchases		2,400

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

Riverbed company
a- Conventional Retail Method
	Cost	Retail
Opening inventory	26304	43000
Add:- purchases (net)	51300	81400	( 50800 - 1900 + 2400 ) and ( 84200 - 2800 )
	77604	124400
Add:- Net markups		9400	( 10800 - 1400 )
Total	77604	133800
Deduct :- Net markupdown		7300	( 9900 - 2600 )
Sale price of goods available		126500
Deduct :- sales		105600
Ending inventory at retail		20900
Cost to retail ratio = 77604 / 133800 = 58%
Ending inventory at cost = 20900 * 58 % = 12122
Answer - 12122