In: Accounting
Presented below is information related to Marin, Inc.
Cost |
Retail |
|||
---|---|---|---|---|
Beginning inventory | $331,500 | $585,000 | ||
Purchases | 1,482,000 | 2,613,000 | ||
Freight on purchases | 63,180 | |||
Markups | 136,500 | |||
Markup cancellations | 109,200 | |||
Abnormal shortage | 11,700 | 20,280 | ||
Markdowns | 68,640 | |||
Markdown cancellations | 9,360 | |||
Employee discounts | 4,056 | |||
Sales revenue | 2,788,500 | |||
Sales returns | 78,000 | |||
Normal shortage | 13,650 | |||
Purchase returns | 17,160 | 31,980 |
Compute ending inventory by the conventional retail inventory
method. (Round percentages for computational purposes
to 1 decimal place, e.g. 0.4158 to 41.6% and final answer to 0
decimal places, e.g. 5,275.)
Ending inventory |
Answer -
Computation of ending inventory by the conventional retail inventory method
Explanation | Cost ($) | Retail ($) | |
Beginning inventory | Given in question | 331500 | 585000 |
Add- Purchases | Given in question | 1482000 | 2613000 |
Add- Freight on purchases | Given in question | 63180 | - |
Less- Purchase returns | Given in question | (17160) | (31980) |
Add- Net markups | $136500 - $109200 | - | 27300 |
Less- Abnormal shortage | Given in question | (11700) | (20280) |
Total | - | 1847820 | 3173040 |
Cost to Retail percentage (%) = 58.2% | ($1847820 / $3173040) * 100 | - | - |
Less- Net markdowns | $68640 - $9360 | - | (59280) |
Goods available for sale | - | 1847820 | 3113760 |
Less- Normal shortage | Given in question | - | (13650) |
Less- Net sales | $2788500 - $78000 | - | (2710500) |
Less- Employee discounts | Given in question | - | (4056) |
Estimated ending inventory at Retail | $3113760 - $13650 - $2710500 - $4056 | - | 385554 |
Estimated ending inventory at Cost | $385554 * 58.2% | 224392 | - |