The financial statements for Telfer Company at January 31, 2017, the following data were available:  ...
The financial statements for Telfer Company at January 31, 2017, the following data were available:
At Cost At Retail
Inventory, February 1, 2017 $70,800 $ 98,500
Markdowns 35,000
Markups 63,000
Markdown cancellations 20,000
Markup cancellations 10,000
Purchases (net) 215,200 288,500
Sales revenue 335,000
Sales returns and allowances 10,000
Required
Compute the ending inventory at cost as of January 31, 2017, using the conventional inventory retail method which approximates lower of cost or market. Your solution should be in good form with amounts clearly labeled.
Homework Answers
Answer
- Ending Inventory at Cost as of Jan 31, 2017
= $ 65,000 Answer - Workings
|
Conventional Retail Method |
||||
|
Cost |
Retail |
Cost to Retail Ratio |
Working |
|
|
Beginning Inventory |
$ 70,800.00 |
$ 98,500.00 |
||
|
Plus: Purchases |
$ 215,200.00 |
$ 288,500.00 |
||
|
Net Markups |
$ 53,000.00 |
[63000 – 10000] |
||
|
$ 286,000.00 |
$ 440,000.00 |
|||
|
Less: Net MarkDowns |
$ 15,000.00 |
[35000 – 20000] |
||
|
Goods Available for sale |
$ 286,000.00 |
$ 425,000.00 |
||
|
Cost to retail Percentage |
65.00% |
( 286000 / 440000 ) x 100 |
||
|
Less: Net Sales |
$ 325,000.00 |
|||
|
Estimated ending inventory at retail |
$ 100,000.00 |
425000 - 325000 |
||
|
Estimated ending Inventory at cost |
$ 65,000.00 |
100000 x 65% |
||
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The financial statements for Telfer Company at January 31, 2017, the following data were available:  ...
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