(Retail Inventory Method) The records for the Clothing department of Magdalena A
ID: 2454063 • Letter: #
Question
(Retail Inventory Method) The records for the Clothing department of Magdalena Aguilarsstor are summarized below for the month of January. inventory, Jan 1: at retail $25000; at cost $17000 Purchases in Jan: at retail $137,000; at cost $86,500 Freight-in: $7000 Purchase returne: at retail $3000; at cost $2300 Transfers in from suburban branch: at retail $13000; a cost$9200 Net markups: $8000 Net markdowns: $4000 Invenory losses due to normal breakage, etc: at retail$400 Sales at retail: $85000 Sales returns: $2400 Instructions a) Compute the inventory for this department as Jan 31, atretail prices b) Compute the ending inventory usinglower-of-average-cost-or-market. (Retail Inventory Method) The records for the Clothing department of Magdalena Aguilarsstor are summarized below for the month of January. inventory, Jan 1: at retail $25000; at cost $17000 Purchases in Jan: at retail $137,000; at cost $86,500 Freight-in: $7000 Purchase returne: at retail $3000; at cost $2300 Transfers in from suburban branch: at retail $13000; a cost$9200 Net markups: $8000 Net markdowns: $4000 Invenory losses due to normal breakage, etc: at retail$400 Sales at retail: $85000 Sales returns: $2400 Instructions a) Compute the inventory for this department as Jan 31, atretail prices b) Compute the ending inventory usinglower-of-average-cost-or-market.Explanation / Answer
COST
RETAIL
A
B
COST
RETAIL
Inventory Jan1 17000 25000 Purchases 86500 137000 Freight-in 7000 Purchases return -2300 -3000 T/f from branch 9200 13000 Net markups 8000 Goods available for sale 117400 180000 Net marks down -4000 Normal breakage -400 Sale 85000 less sales return 2400 -82600A
Ending Inventory (atretail) 93000 Cost to retail % = $117400 / 180000 = 65.20%B
Ending inventoryat lower-of-cost-or-market = 65.2% X $93000 = $60,636Related Questions
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