Question

Estimating Ending Inventory REST, Inc. maintains a large warehouse for storing inventory. Unfortunately, the warehouse and...

Estimating Ending Inventory

REST, Inc. maintains a large warehouse for storing inventory. Unfortunately, the warehouse and all of its contents were badly damaged due to a fire started by an employee who had recently been laid off. Fortunately for the company, the local fire department was able to put out the fire before all of the inventory was lost.

You have been asked to use company records to determine the amount of merchandise lost in the fire. The following information is from the main office records: NOTE: Please round all of your percentage calculations to the nearest 1%. For example, .167 (16.7%) would be rounded to .17 (17%).

Cost

Retail

Beginning Inv.

$950,000

$2,536,500

Purchases

$4,987,500

$13,665,750

Purchase Discount

$74,813

$187,031

Purchase Returns

$124,688

$361,594

Freight-in

$498,750

Markups

$1,425,000

Markdown cancellations

$1,140,000

Markdowns

$2,850,000

Employee discounts

$17,100

Sales (net)

$10,925,000

Average Cost Markup

200%

Cost of inventory still on hand and undamaged:

$526,300

Using the Retail Inventory Method (RIM), what was REST’s Ending Inventory at Retail value before the fire?

Homework Answers

Answer #1

Inventory Lost In Fire     =

Ending Inventory less Cost of Inventory still on hand & undamaged

                                                = $ 1637814 - $ 526300
                                                = $ 11,11,514.00
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Presented below is information related to A Inc. Cost Retail Inventory, 12/31/20 $252,200 $392,200 Purchases 835,506...
Presented below is information related to A Inc. Cost Retail Inventory, 12/31/20 $252,200 $392,200 Purchases 835,506 1,455,300 Purchase returns 59,700 79,000 Purchase discounts 18,000 — Gross sales revenue — 1,418,600 Sales returns — 96,800 Markups — 117,800 Markup cancellations — 40,500 Markdowns — 45,100 Markdown cancellations — 19,600 Freight-in 42,100 — Employee discounts granted — 7,900 Loss from breakage (normal) — 4,500 Assuming that A Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at...
Question 4 Sunshine Snacks uses the conventional retail inventory method to estimate its inventory cost. Presented...
Question 4 Sunshine Snacks uses the conventional retail inventory method to estimate its inventory cost. Presented below is the relevant inventory information for the year to December 31, 2019. Cost Retail Inventory (January 1, 2019) $375,000 $ 550,000 Purchases 1,369,000 2,050,000 Purchase returns 90,000 120,000 Purchase discounts 27,000 – Gross sales (after employee discounts) – 2,110,000 Sales returns – 145,000 Markups – 180,000 Markup cancellations – 60,000 Markdowns – 65,000 Markdown cancellations 30,000 Freight-in 63,000 – Employee discounts granted –...
Presented below is information related to Skysong, Inc. Cost Retail Beginning inventory $365,500 $645,000 Purchases 1,634,000...
Presented below is information related to Skysong, Inc. Cost Retail Beginning inventory $365,500 $645,000 Purchases 1,634,000 2,881,000 Freight on purchases 69,660 Markups 150,500 Markup cancellations 120,400 Abnormal shortage 12,900 22,360 Markdowns 75,680 Markdown cancellations 10,320 Employee discounts 4,472 Sales revenue 3,074,500 Sales returns 86,000 Normal shortage 15,050 Purchase returns 18,920 35,260 Compute ending inventory by the conventional retail inventory method. (Round percentages for computational purposes to 1 decimal place, e.g. 0.4158 to 41.6% and final answer to 0 decimal places,...
Windsor Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Windsor Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018. Inventory, October 1, 2018     At cost $52,700     At retail 77,400 Purchases (exclusive of freight and returns)     At cost 306,656     At retail 430,500 Freight-in 16,500 Purchase returns     At cost 5,600     At retail 8,000 Markups 9,200 Markup cancellations 1,900 Markdowns (net) 3,700 Normal spoilage and breakage 10,000 Sales revenue 394,500 What is...
Wildhorse Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Wildhorse Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018. Inventory, October 1, 2018     At cost $51,900     At retail 77,300 Purchases (exclusive of freight and returns)     At cost 268,222     At retail 425,400 Freight-in 16,500 Purchase returns     At cost 5,500     At retail 8,100 Markups 9,100 Markup cancellations 2,000 Markdowns (net) 3,600 Normal spoilage and breakage 9,900 Sales revenue 389,600 (a) Using...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold. Data for 2021 are as follows: Cost Retail Beginning inventory $ 97,000 $ 187,000 Purchases 363,000 587,000 Freight-in 9,700 Purchase returns 7,700 11,700 Net markups 16,700 Net markdowns 12,700 Normal spoilage 3,700 Abnormal spoilage 5,546 8,700 Sales 547,000 Sales returns 10,700 The company records sales net of employee discounts. Employee discounts for 2021 totaled $4,700. Required: 2. Estimate Sparrow’s ending inventory and cost of...
Marigold Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Marigold Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2021. Inventory, October 1, 2021     At cost $51,900     At retail 77,300 Purchases (exclusive of freight and returns)     At cost 268,222     At retail 425,400 Freight-in 16,500 Purchase returns     At cost 5,500     At retail 8,100 Markups 9,100 Markup cancellations 2,000 Markdowns (net) 3,600 Normal spoilage and breakage 9,900 Sales revenue 389,600 (a) Using...
Sunland Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Sunland Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2021. Inventory, October 1, 2021     At cost $50,900     At retail 79,400 Purchases (exclusive of freight and returns)     At cost 289,140     At retail 422,700 Freight-in 16,500 Purchase returns     At cost 5,700     At retail 7,900 Markups 9,000 Markup cancellations 2,000 Markdowns (net) 3,700 Normal spoilage and breakage 10,100 Sales revenue 387,000 (a) Using...
Metlock Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Metlock Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2021. Inventory, October 1, 2021     At cost $50,900     At retail 79,400 Purchases (exclusive of freight and returns)     At cost 289,140     At retail 422,700 Freight-in 16,500 Purchase returns     At cost 5,700     At retail 7,900 Markups 9,000 Markup cancellations 2,000 Markdowns (net) 3,700 Normal spoilage and breakage 10,100 Sales revenue 387,000 (a) Using...
Sunland Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements....
Sunland Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2021. Inventory, October 1, 2021     At cost $52,900     At retail 78,600 Purchases (exclusive of freight and returns)     At cost 283,025     At retail 425,100 Freight-in 16,400 Purchase returns     At cost 5,600     At retail 8,000 Markups 8,800 Markup cancellations 2,000 Markdowns (net) 3,500 Normal spoilage and breakage 9,800 Sales revenue 397,200 (a) Using...