Question

o April E9-22 (L05) (Retail Inventory e Retail Inventory Method) The records of Ellen's Boutique report the following t Sales revenue Sales returns Markups Markup cancellations Markdowns Markdown cancellations Freight on purchases $99,000 2.000 10.000 1,500 9,300 2.800 2.400 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) $48,000 88,000 2,000 3,000 30,000 46,500

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Answer 1

Answer Calculation of Ending Inventory by the Conventional Retail Inventory method Cost $30,000 $48,000 ($2,000) $2,400 $78,400 Retail $46,500 $88,000 ($3,000) Beginning Inventory Purchases Purchase Returns Freight on Purchases Totals Add: Net Markups: Markups Markup Cancellations $131,500 $10,000 ($1,500) $8,500 $140,000 $78,400 $9,300 ($2,800) Deduct: Net markdowns: Markdowns Markdown Cancellations Net Markdowns Sales Price of Goods Available Deduct: Net sales ($99,000 - $2,000) Ending inventory, at retail $6,500 $133,500 $97,000 $36,500 Cost-to-Retail Ratio = $78,400 / $140,000 = 56% Ending Inventory at Cost = $36,500 x 56% = $20,440