Question

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

Sales revenue		$100,100		Purchases (at cost)		$47,400
Sales returns		1,900		Purchases (at sales price)		95,300
Markups		9,500		Purchase returns (at cost)		1,900
Markup cancellations		1,500		Purchase returns (at sales price)		2,900
Markdowns		9,800		Beginning inventory (at cost)		37,344
Markdown cancellations		2,800		Beginning inventory (at sales price)		48,800
Freight on purchases		2,200

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

Answer 1

ANSWER

As per the given question,

A retail 3 Particulars 4 Beginning inventory 5 purchases 6 Less - purchase returns schedule showing computation of ending inventory based on conventional retail menthod cost L 3 7344 47400 1900 48800 95300 2900 9500 -1500 8000 8 Add - net markup 9 mark up 10 less-markup cancellation 11 freight 12 Cost of goods available for sale 13 costs to retail ratio = 2 2200 8 8844 .573187097 i.e 0.57 155000 1 0 14 88844 155000 9800 2800 -7000 15 Cost of goods available for sale 16 less net mark down 17 mark down 18 less mark down cancellation net sales 19 net sales 20 less sales return 21 less-net sales 22 ending inventory 23 Ending invetory cost = 1001001 1900 98200 49800 28544.71742 i.e 28545 25 ending inventory at cost is 28545 26 ending inventory at retail is 49800

28 cost of goods sold = cost of goods available - ending inventory 29 cost of goods available for sale 88844 30 Less - ending inventory 285451 60299 32 cost of goods sold is 105200 155000 49800 105200 23 Ending invetory cost -49800*B13 i.e 28545