Question

Presented below is information related to Culver Company.

		Cost		Retail
Beginning inventory		$ 63,190		$103,900
Purchases (net)		117,310		182,500
Net markups				11,288
Net markdowns				26,066
Sales revenue				170,960

Compute the ending inventory at retail.

Ending inventory

$

Compute a cost-to-retail percentage under the following conditions. (Round ratios to 2 decimal places, e.g. 78.74%)

				Cost-to-retail percentage
(1)		Excluding both markups and markdowns.			%
(2)		Excluding markups but including markdowns.			%
(3)		Excluding markdowns but including markups.			%
(4)		Including both markdowns and markups.			%

Which of the methods in (b) above does the following?

(1)		Provides the most conservative estimate of ending inventory.		Excluding Both Markups and Markdowns.Excluding Markdowns but Including MarkupsExcluding Markups but Including MarkdownsIncluding Both Markdowns and Markups
(2)		Provides an approximation of lower-of-cost-or-market.		Excluding Both Markups and Markdowns.Excluding Markdowns but Including MarkupsExcluding Markups but Including MarkdownsIncluding Both Markdowns and Markups
(3)		Is used in the conventional retail method.

Compute ending inventory at lower-of-cost-or-market. (Round ratio to 2 decimal places, e.g. 78.74% and final answer to 0 decimal places, e.g. 6,225.)

Ending inventory

$

Compute cost of goods sold based on (d). (Round answer to 0 decimal places, e.g. 6,225.)

Cost of goods sold

$

Compute gross margin based on (d). (Round answer to 0 decimal places, e.g. 6,225.)

Gross margin

$

Answer 1