Presented below is information related to Ricky Henderson Company. Cost Retail B
ID: 2475724 • Letter: P
Question
Presented below is information related to Ricky Henderson Company. Cost Retail Beginning inventory $ 53,640 $ 286,200 Purchases 1,449,000 2,142,000 Markups 94,000 Markup cancellations 17,800 Markdowns 44,000 Markdown cancellations 7,400 Sales revenue 2,303,000 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
Cost Retail Beginning inventory 53,640 2,86,200 Purchases 14,49,000 21,42,000 Total 15,02,640 24,28,200 Add: Markups 94,000 Less:Markup Cancellations -17,800 Total 15,02,640 25,04,400 Less: Mark Downs -44,000 Add: Markdown Cancellations 7,400 Sales price of goods available 15,02,640 24,67,800 Less: Sales -23,03,000 Ending inventory at retail 1,64,800 Cost to retail ratio = 1,502,640 / 2,504,400 = 60% Ending inventory cost = 164,800*60% = 98,880