The records of Crane’s Boutique report the following data for
the month of April.
Sales revenue |
$108,600 |
Purchases (at cost) |
$49,700 | |||
---|---|---|---|---|---|---|
Sales returns |
1,900 |
Purchases (at sales price) |
92,100 | |||
Markups |
9,200 |
Purchase returns (at cost) |
1,900 | |||
Markup cancellations |
1,300 |
Purchase returns (at sales price) |
2,800 | |||
Markdowns |
8,300 |
Beginning inventory (at cost) |
35,220 | |||
Markdown cancellations |
2,600 |
Beginning inventory (at sales price) |
45,000 | |||
Freight on purchases |
2,300 |
Compute the ending inventory by the conventional retail inventory
method. (Round ratios for computational purposes to 0
decimal places, e.g. 78% and final answer to 0 decimal places, e.g.
28,987.)
Ending inventory using conventional retail inventory method |
($enter the dollar amount of the ending inventory by the conventional retail inventory method rounded to 0 decimal places) |
Conventional Retail Inventory Method | |||
COST | RETAIL | ||
Beginning inventory | 35220 | 45000 | |
Purchases | 49700 | 92100 | |
Freight on Purchase | 2300 | - | |
Less: Purchase Return | (1900) | (2800) | |
Totals | 85320 | 134300 | |
Add: Markups | 9200 | ||
Markup cancellations | (1300) | ||
Totals | 85320 | 142200 | |
Less: Markdowns | (8300) | ||
Markdown cancellations | 2600 | ||
Goods available for sale at retail | 136500 | ||
Less: Sales | (108600) | ||
Sales returns | 1900 | ||
Ending inventory at retail | 29800 | ||
COST | SALES | RATIO | |
Cost-to-retail ratio: | 85320 | 142200 | 60% (85320/142200) |
Computation of ending inventory at cost: | |||
Ending inventory at retail (a) | 29800 | ||
Cost-to-retail ratio (b) | 60% | ||
Ending inventory at cost (a*b) | =29800*60% | 17880 |
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