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Exercise 9-21 Presented below is information related to Novak Company Cost Retail Beginning inventory Purchases Markups Markup cancellations Markdowns Markdown cancellations Sales revenue $103,540 $281,000 1,376,000 2,105,000 93,600 13,700 38,300 4,800 2,179,000 Compute the inventory by the conventional retail inventory method Round ratios for computational purposes to O decimal places, e g 78% and inal answer to O decimal places, eg, 28,987. Ending inventory using conventional retail inventory methods

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Answer is highlighted in yelllow: Solution: Retail Inventory Method: Conventional (LCM) Particulars Beginning Inventory Plus: Net Purchases Net Markups Less: Net Markdowns Goods available for sale Cost to Ratail Ratio Cost 103540 1376000 Retail 281000 2105000 79900 33500 2432400 (93600-13700) 38300-4800 0 1479540 Cost to retail percentage (1479540)/(2432400-33500)0.6000 or: 60.00% Net Sales Estimated ending inventory at retail Estimated ending inventory at cost (253400*60%) 2179000 253400 152040

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