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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Cost
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Cost
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$ 29,000
$ 45,000
Additional markups
—
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140,000
190,000
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—
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—
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Purchases returns
5,000
8,000
Markdown cancellations
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Freight-in
20,000
—
Net Sales
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190,000
Employee discounts
—
3,000
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Sales
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Purchase (at cost)
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Sales returns
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Purchase (at retail)
112,600
Additional markups
10,500
Purchase return (at cost)
2,500
Markup cancellations
1,500
Purchase return (at retail)
3,500
Markdowns
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Markdown cancellations
2,800
Beginning inventory (at retail)
48,500
Freight on purchase
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Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2018 are as
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Cost
Retail
Beginning inventory
$
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$
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Purchases
352,000
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Freight-in
8,900
Purchase returns
6,900
10,900
Net markups
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Net markdowns
11,900
Normal spoilage
2,900
Abnormal spoilage
4,512
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Sales
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Sales returns
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Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2016 are as
follows:
Cost Reatail
Begining inventory. $90,000. $180,000
Purchases 335,000. 580,000
Freight in 9,000
Purchase returns. 7,000 11,000
Net markups 16,000
Net markdowns 12,000
Normal spoilage 3,000
Abnormal spoliage. 4,800 8,000
Sales 540,000
Sales returns 10,000
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follows: Cost Retail Beginning inventory $ 83,000 $ 173,000
Purchases 368,000 573,000 Freight-in 8,300 Purchase returns 6,300
10,300 Net markups 15,300 Net markdowns 11,300 Normal spoilage
2,300 Abnormal spoilage 4,405 7,300 Sales 533,000 Sales returns
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Required: 1. Estimate Sparrow’s ending inventory and cost of...
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ending inventory and cost of goods sold. Data for 2016 are as
follows: Cost Retail Beginning inventory $ 92,000 $ 182,000
Purchases 360,000 582,000 Freight-in 9,200 Purchase returns 7,200
11,200 Net markups 16,200 Net markdowns 12,200 Normal spoilage
3,200 Abnormal spoilage 4,840 8,200 Sales 542,000 Sales returns
10,200 The company records sales net of employee discounts.
Discounts for 2016 totaled $4,200. Required: 1. Estimate Sparrow’s
ending inventory and cost of goods...
Sparrow Company uses the retail inventory method to estimate ending inventory and cost of goods sold....
Sparrow Company uses the retail inventory method to estimate
ending inventory and cost of goods sold. Data for 2018 are as
follows:
Cost
Retail
Beginning inventory
$
96,000
$
186,000
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
3,600
Abnormal spoilage
5,520
8,600
Sales
546,000
Sales returns
10,600
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2018 totaled $4,600.
Required:
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ending inventory and cost of goods sold. Data for 2018 are as
follows:
Cost
Retail
Beginning inventory
$
87,000
$
177,000
Purchases
359,000
577,000
Freight-in
8,700
Purchase returns
6,700
10,700
Net markups
15,700
Net markdowns
11,700
Normal spoilage
2,700
Abnormal spoilage
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Sales
537,000
Sales returns
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2018 totaled $3,700.
Required:
1. Estimate Sparrow’s ending inventory and cost of
goods...
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