Question

9. (12 points) The records of Riverbed’s Boutique report the following data for the month of April. Sales revenue $106,300 Purchases (at cost) $51,500 Sales returns 2,100 Purchases (at sales price) 88,500 Markups 10,100 Purchase returns (at cost) 2,100 Markup cancellations 1,700 Purchase returns (at sales price) 3,000 Markdowns 9,800 Beginning inventory (at cost) 17,564 Markdown cancellations 2,900 Beginning inventory (at sales price) 42,500 Freight on purchases 2,600 Compute the ending inventory as indicated below. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) a. Ending inventory using conventional (LCM) retail inventory method b. Ending inventory using LIFO retail inventory method

9. (12 points) The records of Riverbed's Boutique report the following data for the month of April. Sales revenue $106,300 Sales returns 2,100 Markups - 10,100 Markup cancellations - 1,700 Markdowns 9,800 Markdown cancellations – 2,900 Freight on purchases 2,600 Purchases (at cost) Purchases (at sales price) Purchase returns (at cost) - Purchase returns (at sales price) Beginning inventory (at cost) Beginning inventory (at sales price) $51,500 88,500 2,100 3,000 17,564 42,500 - Compute the ending inventory as indicated below. (Round ratios for computational purposes to O decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) a. Ending inventory using conventional (LCM) retail inventory method b. Ending inventory using LIFO retail inventory method

Answer 1

particulars	cost	retail
beginning inventory	$              17,564.00	$        42,500.00
purchases	$              51,500.00	$        88,500.00
purchases returns	$              -2,100.00	$        -3,000.00
freight on purchsases	$                2,600.00
total	$              69,564.00	$    1,28,000.00
(+) markups		$        10,100.00
(-)markup cancellation		$        -1,700.00
COST OF GOODS AVAILABLE FOR SALE	$             69,564.00	$    1,36,400.00
(+) mark downs		$        -9,800.00
(-) markdown cancellations		$          2,900.00
sale price of goods available for sale(A)	$              69,564.00	$    1,29,500.00
(-) net sales($106300-$2100)(B)		104200
ending inventory at retail price		$        25,300.00
(A-B)
ENDING INVENTORY BY CONVENTIONAL RETAIL INVENTORY METHOD
COST OT RETAIL RATIO=	69567/136400*100	51%
ENDING INVENTORY=	25300*51%	$        12,903.00

ENDING INVENTORY AT LIFO RETAIL INVENTORY METHOD
	COST(A)	RETAIL PRICE(B)	COST TO RETAIL RATIO(A/B)
BEGINNING INVENTORY	17564	42500	41%
COST OF GOODS AVAILABLE FOR SALE	69564	136400	51%

ENDING INVENTORY PRICE	LAYERS AT RETAIL PRICE		COST TO RETAIL RATIO	ENDING LIFO RETAIL COST
		(A)	(B)	(A)*(B)
$                            25,300.00	OPENING	$ 42,500.00	41%	17425
	CLOSING	$ -17,200.00	51%	-8772
		$ 25,300.00		8653
ENDING INVENTORY AT LIFO RETAIL INVENTORY METHOD=$8653