Question

PRINTER VERSION RACK NEXT Problem 9-10 Indigo 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. $52,600 77,100 239,370 420,900 16,700 Inventory, October 1, 2018 At cost At retail Purchases (exclusive of freight and returns) At cost At retail Freight-in Purchase returns At cost At retail Markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales revenue 5,500 7,900 8,900 2,000 3,500 10,100 385,800 (a) Using the conventional retail method, prepare a schedule computing estimated lower-of-cost or market inventory for October 31, 2018. (Round ratios for computational purposes to o decimal places, e.g 789 and final answer to o decimal places, e.g. 28,087.) Ending inventory at lower-of-cost-or-market

Answer 1

Answer Cost $ 52,600 $ 239,370 $ 16,700 -$ 5,500 Retail $77,100 $420,900 Add Add Less Add (8,900-2000 $303,170 Beginning Inventory Purchases Freight in Purchase Return Net Markups Good Available for sale Cost to retail percentage Net Markdown Normal spoilage and breakage Net sales Estimated Ending Inventory - Retail Estimated Ending Inventory - Cost |-$7,900 $ 6,900 $ 497,000 61% - $3,500 -$ 10.100 -$ 388,800 $ 94,600 Less Less Less $ 57,706 Working Estimated Ending Inventory - Cost = $94,600 *61%=$57,706

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