Exercise 9-20 The records of Ellen’s Boutique report the following data for the

Question

Exercise 9-20 The records of Ellen’s Boutique report the following data for the month of April. Sales revenue $97,200 Purchases (at cost) $71,500 Sales returns 4,000 Purchases (at sales price) 97,600 Markups 11,300 Purchase returns (at cost) 4,000 Markup cancellations 1,400 Purchase returns (at sales price) 5,300 Markdowns 9,500 Beginning inventory (at cost) 23,055 Markdown cancellations 4,600 Beginning inventory (at sales price) 53,300 Freight on purchases 4,300 Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using conventional retail inventory method $

Explanation / Answer

Cost Retail Beginning inventory 23055 53300 Purchases 71500 97600 Less Purchase return -4000 -5300 Add Markups 11300 less markup cancellations -1400 Freight in 4300 Available 94855 155500 Less Markdown 9500 Add markdown cancellation 4600 less sales 97200 add sales return 4000 Inventory at retail 57400 cost/retail ratio ( 94855/155500) 61% inventory at cost under conventional retail 35014

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