Question

Please answer Part 1 and 2.

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Required information LeMay Department Store uses the retail inventory method to estimate ending Inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2021: Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts Cost Retail $ 58,000 $ 78,000 225,000 418,000 21,060 8,50€ 11,000 7,600 5,300 11,000 298,000 2.000 Sales are recorded net of employee discounts. Required: 1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method. Cost-to-Retail Cost Retail Ratio

Answer 1

I Answer Details Beginning Inventory Add: Net purchase Less: Purchase returns Freight- en Met markups Good Quailable for sale 0 (Before maredowns Less! Net Markdowns Goods available for sale (After Markdowns) Less: Neowal breakage Net sales Employee discounts Estimated ending inventory Cost (s) 1 Retail ( 58.000 78000 1225,000 418.000 (8500) 11000 21,060 7600 1295,560 492,600 (6,300) 295,560 487,300 f1000) (298,000) (2000) 17 6,300 of retail maled ending inventing atas Llos, 780 Ending cost of goods sold 189,750 Working Noel's cost to retail percenloge: - hoody available for sale atcost (Before markdowy Goods available for sale at retail Bebore markdowry) =1295,560/492,600) X 100 = 60% . markdown Xloo

Estimated ending Inventory costat list: ending inventory at retail & cost to retail percentage = 176,300X 607 - 105,780 Estinuated cost of goody sold! ending goods available for sale of cost-After markdowny) - Estimated Inventory of cost = 295,560-105,780 = 189,780 (2) Recompute the cost to retail percentage by using average Colf Method: Croods available for sale at cost Colt-to-retail percentage = After markdownt) x100 Goody available for sale af relail 295,560 *100 487,300 After man downs 560.65%