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Required Information [The following information applies to the questions displayed below.) SmithKline Company maintains inven
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Answer #1

The correct answer is:

$142470.80

Notes

The method to calculate the ending inventory will be as under:

$ Millions
Particulars Cost Method Retail Method
Beginning Inventory 78 123
Add: Net Purchases 668 1002
Add: Freight Inward 28
Add: Mark up 5
= Goods available for sale before markdown 774 1130
Less: Net Markdowns 8
= Goods available for sale after markdown 774 1122
Less: Sales 914
= Estimated Ending Inventory       1,42,470.80 208

Ending inventory at cost = (Goods available for sale before markdown (AT COST) / Goods available for sale before markdown (AT RETAIL))* ending inventory at retail

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