The records of Carla\'s Boutique report the following data for the month of Apri

Question

The records of Carla's Boutique report the following data for the month of April Sales revenue Sales returns Markups Markup cancellations Markdowns Markdown cancellations Freight on purchases $98,700 2,000 9,300 1,400 9,500 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)46,300 $45,500 90,400 2,000 3,100 34,755 Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes e.g. 28,987.) Ending inventory using conventional retail inventory method

Explanation / Answer

Conventional Method ($) Cost Retail Beginning Inventory       34,755         46,300 Purchases       45,500         90,400 Purchase Retuns        -2,000         -3,100 Freight         2,400 Add:Net Markups (less of cancellation)           7,900 Cost of Goods Available for Sale              80,655             1,41,500 cost retail ratio = cost / retail = 80655/141500 Less: mark down (less of cancellation)         -6,700 = 57% Less: Sales revenue       -98,700 Add: Sales Return           2,000 Inventory at retail                38,100 cost retail ratio 57% Inventory under conventional method (38100*57%) 21717

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