Question

Presented below is information related to Bonita Inc. Retail Cost Inventory, 12/31/20 $251,300 $387,300 Purchases 962.468 1,455,600 Purchase returns 58,800 78,800 Purchase discounts 18,000 Gross sales revenue 1,421,800 98,300 Sales returns 117,600 Markups 40,500 Markup cancellations 45,700 Markdowns 20,200 Markdown cancellations Freight-in 41,400 Employee discounts granted 7,900 Loss from breakage (normal) 4,500 Assuming that Bonita Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at December 31, 2021. (Round ratios for computational purposes to 0 decimal places, e.g 78% and final answer to O decimal places, e.g. 28,987.) $ Ending inventory using the conventional retail inventory method

Answer 1

Retail Cost 251,300 962,468 (58,800) (18,000) 41,400 1,178,368 387,300 1,455,600 (78,800) 1,764,100 Beginning Inventory Add: Purchases Less: Purchase returns Purchase discounts Add: Freight In Total Add: Net Markups Markups Markups cancellation Total Less: Net Markdowns Markdowns Markdowns cancellation 117,600 (40,500) 77,100 1,841,200 1,178,368 45,700 (20,200) Less: Employee discounts Loss from Breakage 25,500 1,815,700 (7,900)| (4,500) 1,803,300 Less: Net Sales Gross Sales Sales returns Ending Inventory at retail 1,421,800 (98,300) 1,323,500 479,800 Cost to retail ratio (1,178,368 + 1,841,200) 0.64 Ending Inventory at cost (479,800 x 0.64) 307,072 Ending Inventory using conventional retail inventory method $ 307,072