Question
In: Accounting
On June 30, Concord Corporation has the following data pertaining to the retail inventory method. Goods...
On June 30, Concord Corporation has the following data
pertaining to the retail inventory method. Goods available for
sale: at cost $55,600; at retail $69,500; net sales $40,900; and
ending inventory at retail $28,600.
Compute the estimated cost of the ending inventory using the retail
inventory method.
Solutions
Expert Solution
Computation of Estimated ending Inventory at cost is as follows:
Ending Inventory at cost = Ending inventory at retail x Cost to retail ratio
= $ 28,600 x 80%
= $ 22,880
Thus, Ending Inventory at cost is $ 22,880
Working note:
Cost to retail ratio = ( Goods available for sale : at cost / Goods available for sale : at retail ) * 100
= ( $ 55,600 / $ 69,500 ) * 100
= 80%
| Retail Method | ||||
| Cost | Retail | Cost to Retail % | ||
| (i) | Goods available for sale ( given ) | $ 55,600 | $ 69,500 | 80% |
| (ii) | Net Sales | $ 40,900 | ||
| (iii) | Ending Inventory at retail (i)-(ii) | $ 28,600 |
ekkarill92 answered 2 years agoRelated Solutions
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Employee discounts
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Purchase return (at cost)
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Purchases
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Purchase returns
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Net markups
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Net markdowns
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Normal spoilage
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follows:
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Purchases 335,000. 580,000
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Purchase returns. 7,000 11,000
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Net markdowns 12,000
Normal spoilage 3,000
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Cost
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Beginning inventory
$
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$
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Purchases
361,000
586,000
Freight-in
9,600
Purchase returns
7,600
11,600
Net markups
16,600
Net markdowns
12,600
Normal spoilage
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Purchases
359,000
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Freight-in
8,700
Purchase returns
6,700
10,700
Net markups
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Net markdowns
11,700
Normal spoilage
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