Question

Requirement 1: ALQUIST COMPANY Conventional Retail Method $ $ Beginning inventory Plus: Purchases Freight-in Plus: Net markups Cost 100,000 1,387,000 10,000 Retail 150,000 2,000,000 . 300,000 2,450,000 Cost-to-retail percentage: 1,497,000 (150,000 2,300,000 (15.000) Related Less: Net markdowns Goods available for sale Less: Normal shrinkage Sales: Sales to customers Sales to employees Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold 1,750,000 250,000 (62,500) 2.285.000 <- Try again $ 1,361,508 e-Correct

Answer 1

		Cost	Retail
Beginning inventory		100,000	150,000
Plus:Purchases		1387000	2000000
Fright in		10000
Plus Net Markups			300000
			2,450,000
Cost-to-ratail Percentage	0.61
Less: Net Markdowns			-150,000
Goods Available for sale			2,300,000
Less:
Normal Shrinkage			-15000
Sales:
Sales to customers	1750000
Sales to Employee	250000
Employee Discounts	-62500
			-2062500
Estimated Ending Inventory at retail			222,500
Estimated Ending Inventory at cost		135,492
Estimated cost of goods sold		1,361,508

For 2062500 : you should add sales and also the employee discount.

Note:Employee discount is a incur cost when we think in retail

Sales and Discounts are decreased from the purchase and beg inventory so to find ending inventory