In: Accounting
Presented below is information related to Pronghorn
Company.
Cost |
Retail |
|||
Beginning inventory | $ 61,600 | $107,300 | ||
Purchases (net) | 120,170 | 180,700 | ||
Net markups | 10,325 | |||
Net markdowns | 26,679 | |||
Sales revenue |
187,090 |
a) Compute ending inventory at lower-of-cost-or-market.
b) Compute cost of goods sold based on (a)
c) Compute gross margin based on (a)
a) | Cost | Retail | |
Beginning inventory | $ 61,600 | $ 107,300 | |
Purchases (net) | $ 120,170 | $ 180,700 | |
Net markups | $ 10,325 | ||
$ 120,170 | $ 298,325 | ||
Net markdowns | $ 26,679 | ||
$ 120,170 | $ 271,646 | ||
Sales revenue | $ 187,090 | ||
Ending inventory at retail | $ 84,556 | ||
Ending inventory=84556*120170/298325=34,060.49 | |||
b) | Cost of goods sold=120170-34060.49= $ 86109.51 | ||
c) | Gross profit=187090-86109.51=$ 100,980.49 |