Question

Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

   

	Cost	Retail
Beginning inventory	$43,000	$67,000
Net purchases	152,000	211,000
Net markups		22,000
Net markdowns		38,000
Net sales		222,000

   

To the nearest thousand, estimated ending inventory using the conventional retail method is (Do not round intermediate calculations):

   

Answer 1

explanation or summary:

1.when you calculate the cost of goods available for sale you can include the markups and exclude the markdowns.

2. cost to retail percentage is calculated by using the cost of goods available for sale at cost and at retail

3. you can calculate ending inventory at cost by multiplying the ending inventory at cost with cost to retail ratio.