The XYZ Company uses the conventional retail inventory method to estimate ending inventory for its monthly...

The XYZ Company uses the conventional retail inventory method to estimate ending inventory for its monthly financial statements and presents the following data for one department for February 2020. Present a schedule that shows the ending inventory at cost and highlight that cell with color and a thick outside border. Label each column and row clearly so your workpaper can be used by other people in Marquette's accounting department. Present the cost to retail percentage as a percentage with two decimal places.

Inventory, February 1, 2020
At cost	$ 46,000
At retail	81,000
Purchases (exclusive of freight and returns):
At cost	249,600
At retail	423,000
Freight-in	15,400
Purchase returns:
At cost	7,511
At retail	11,350
Markups	2,500
Markup cancellations	1,250
Markdowns (net)	3,600
Sales revenue	245,000

Expert Solution

Conventional Retail Method
	Cost	Retail	Cost to Retail Ratio	Working
Beginning Inventory	$ 46,000.00	$ 81,000.00
*Plus:* Purchases	$ 249,600.00	$ 423,000.00
Purchase Returns	$ (7,511.00)	$ (11,350.00)
Freight In	$ 15,400.00
Net Markups		$ 1,250.00
	$ 303,489.00	$ 493,900.00
*Less:* Net MarkDowns		$ 3,600.00
Goods Available for sale	$ 303,489.00	$ 490,300.00

*Cost to retail Percentage*			61.45%	( $303489 /$ 493900 ) x 100
*Less:* Net Sales		$ 245,000.00
Estimated ending inventory at retail		$ 245,300.00		$ 490300 - $245000
Estimated ending Inventory at cost	$ 150,736.85 or $ 150737 [ANSWER]			245300 x 61.45%

ekkarill92 answered 2 years ago

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