Question

May’s Dress Shop’s inventory at cost on January 1 was $44,000. Its retail value was $64,000. During the year, May purchased additional merchandise at a cost of $196,000 with a retail value of $396,000. The net sales at retail for the year were $353,000.

Calculate May’s inventory at cost by the retail method. (Round the "cost ratio" to the nearest whole percent.)

	Cost		Retail
Beginning inventory	$ 44,000		$ 64,000
Purchases	196,000		396,000
Cost of goods available for sale	$		$
Less net sales for year			353,000
Ending inventory at retail			$
Cost ratio			%
Ending inventory at cost			$

Answer 1

Calculate May’s inventory at cost by the retail method. (Round the "cost ratio" to the nearest whole percent.)

	Cost		Retail
Beginning inventory	$ 44,000		$ 64,000
Purchases	196,000		396,000
Cost of goods available for sale	$240000		$460000
Less net sales for year			353,000
Ending inventory at retail			$107000
Cost ratio			52%
Ending inventory at cost			$55640