Question

heffield Shoe Store uses the retail inventory method for its two departments, Women’s Shoes and Men’s Shoes. The following information for each department is obtained.

Item		Women’s Shoes		Men’s Shoes
Beginning inventory at cost		$34,000		$46,500
Cost of goods purchased at cost		119,120		139,610
Net sales		178,000		187,000
Beginning inventory at retail		49,500		62,000
Cost of goods purchased at retail		182,500		189,500

Calculate cost-to-retail ratio. (Round answers to 0 decimal places, e.g. 15%.)

		Women’s Shoes			Men’s Shoes
Cost-to-retail ratio			%			%

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Compute the estimated cost of the ending inventory for each department under the retail inventory method. (Round answers to 0 decimal places, e.g. 1,250.)

		Women’s Shoes		Men’s Shoes
Estimated cost of ending inventory		$		$

Answer 1