Question
In: Accounting
Calculate Uncle Butch's' ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.
Retail Inventory Method
Uncle Butch's Hunting Supply Shop reports the following information related to inventory:
Beginning inventory Cost- $ 35,000 Retail- $ 92,000
Purchases Cost- 75,000 Reatil- 200,000
Net additional markups Cost- 0 Retail- 15,000
Net markdowns Cost- 0 Retail- (22,000)
Goods available for sale Cost- $110,000 Retail- $ 285,000
Sales (178,000)
Ending inventory at retail $ 107,000
Calculate Uncle Butch's' ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.
Solutions
Expert Solution
| Retail Inventory method - FIFO | ||
| Particulars | Cost | Retail |
| Purchases | $75,000.00 | $200,000.00 |
| Net additional markups | $15,000.00 | |
| Net markdowns | -$22,000.00 | |
| Total (A) | $75,000.00 | $193,000.00 |
| Cost to retail ratio for Purchases (75000/193000) | 0.389 | |
| Beginning Inventory (B) | $35,000.00 | $92,000.00 |
| Goods Available for Sale (A+B) | $110,000.00 | $285,000.00 |
| Less: Sales | $178,000.00 | |
| Ending inventory at retail | $107,000.00 | |
| Ending inventory at FIFO Cost ($107,000*0.389) | $41,623.00 | |
| Cost of goods sold ($110,000 - $41,623) | $68,377.00 | |
ekkarill92 answered 3 years agoRelated Solutions
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