Presented below is information related to Sandhill Company. Cost Retail Beginnin
ID: 2411672 • Letter: P
Question
Presented below is information related to Sandhill Company. Cost Retail Beginning inventory $379,557 $275,000 Purchases 1,356,000 2,161,000 Markups 94,700 Markup cancellations 15,400 Markdowns 36,700 Markdown cancellations 5,200 Sales revenue 2,170,000 Compute the 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
the inventory by the conventional retail inventory method = $216,522
Cost retail Beginning inventory 379557 275000 Add: Purchases 1356000 2161000 Total 1735557 2436000 Add: Net markups Mark ups 94700 Markup cancellations (15400) 79300 Totals 1735557 2515300 Deduct : Net markdowns Mark downs 36700 Markdown cancellations (5200) 31500 Sale price of goods available 2483800 Less: sales 2170000 Ending inventory at retail 313800 Cost-to-retail ratio (1735557/2515300) = 69% Ending inventory at cost = 313800*69% 216522