Question

Presented below is information related to Kuchinsky Company. Beginning Inventory, Cost 280,000 Retail 390,000.Purchases ,Cost 1,820,000, Retail, 3,000,000.Markups, Retail130,000Markup Cancellations ,Retail 20,000.Markdowns, Retail 47,000. Markdown Cancellation , 7,000.Sales 3,150,000. Compute the ending inventory using the conventional retail inventory method. Answer: Beginning Inventor, 280,000 (Cost), 390,000(retail). Purchases 1,820,000 (Cost) 3,000,000(retail). Totals_____(cost),_____(retail). Markups 130,000(retail),markups cancellation 20,000(retail), Add_______(retail).Add:______,_____(retail). Less: 3,150,000(retail)______,Ending Inventory at retail ______.Cost-to-retail ratio____,_____,_(retail).Ending Inventory at Cost_______(Cost). The following are the choices: 64%,310,000, 61%,2,100,000, 63%,110,000, 65%, 188,150,60%,3,390,000.40%, 3,460,000, 64%

Answer 1

	Cost		Retail
Beginning inventory	280,000		390,000
Purchases	1,820,000		3,000,000
Totals	2,100,000		3,390,000
Add net markups
Markups		130,000
Markups cancellations		(20,000)
			110,000
Totals			3,500,000
Deduct:Net mardowns
Markdowns		47,000
Markdown cancellation		(7,000)	40,000
Sales price of goods available			3,460,000
Deduct:Sales			3,150,000
Ending inventory are retail			310,000
Cost to retail ratio = (2,100,000/3,500,000) = 60%
Ending inventory at cost = (60%*310,000) = $186,000