Question

Brandon Shoe Store uses the retail inventory method to estimate its monthly ending inventories. The following information is available at November 30, 2021: Women’s Shoes Men’s Shoes Cost Retail Cost Retail Beginning inventory $276,000 $424,000 $191,000 $323,000 Purchases 1,181,000 1,801,000 1,046,000 1,772,000 Purchase returns and allowances 24,600 37,000 21,900 36,400 Freight in 6,000 7,200 Sales 1,826,000 1,651,000 Sales returns and allowances 28,000 25,000 At November 30, Brandon Shoe Store takes a physical inventory count at retail. The actual retail values of the inventories in each department on November 30, 2021, are as follows: Women’s Shoes $381,250, and Men’s Shoes $426,100. Determine the estimated cost of the ending inventory at November 30, 2021, using the retail inventory method. (Round cost-to-retail ratios to 1 decimal place, e.g. 52.7% and final answers to 0 decimal places, e.g. 5,275.) Ending inventory at cost Women’s Shoes $ Men’s Shoes $

Answer 1

a) Women Shoes

Women Shoes
Particular	Cost	Retail
Beginning inventory	$       276,000	$         424,000
Purchases	$    1,181,000	$     1,801,000
Less: Purchase return	$          24,600	$           37,000
Add: Freight	$            6,000	$                     -
Goods available for sale	$    1,438,400	$     2,188,000
Less: Sales from retail		$     1,826,000
Add: Sales Return		$           28,000
Ending inventory		$         390,000

% sales of cost to retails	65.74%
(1438400/2188000*100)
Ending inventory at cost	$       256,388
390000*65.74%

b) Men Shoe's

Men Shoes
Particular	Cost	Retail
Beginning inventory	$       191,000	$         323,000
Purchases	$    1,046,000	$     1,772,000
Less: Purchase return	$          21,900	$           36,400
Add: Freight	$            7,200	$                     -
Goods available for sale	$    1,222,300	$     2,058,600
Less: Sales from retail		$     1,651,000
Add: Sales Return		$           25,000
Ending inventory		$         432,600

% sales of cost to retails	59.38%
(1222300/2058600*100)
Ending inventory at cost	$       256,858
432600*59.38%