Please solve all the questions with explinations The following data concerning t
ID: 2565095 • Letter: P
Question
Please solve all the questions with explinations
The following data concerning the retail inventory method are taken from the financial records of Lopez Company Retail $280,000 1,280,000 Cost Beginning inventory Purchases Freight-in Net markups Net markdowns Sales S 196,000 896,000 24,000 80,000 56,000 1,344,000 If the ending inventory is to be valued at approximately the lower of cost or market (conventional retail method), the calculation of the cost-to-retail ratio should be based on goods available for sale at (1) cost and (2) retail, respectively of 1. 2. The ending inventory at retail should be 3. The approximate cost ofthe ending inventory by the conventional retail method is .Explanation / Answer
1)
2)Cost to retail ratio1116000/1640000= .6805 or 68.05%
Ending inventory at retail :240000
3)Ending inventory at cost:240000*.6805 = $ 163320
cost Retail Beginning 196000 280000 Purchase 896000 1280000 Freight in 24000 Merchandise available for sale [Ans part 1] 1116000 1560000 Add:Mark up 80000 1116000 1640000 less:mark down -56000 1116000 1584000 Les:sales -1344000 Ending inventory at retail 240000