The records of Ellen's Boutique report the following data for the month of April.
|Sales revenue||$97,700||Purchases (at cost)||$57,300|
|Sales returns||3,000||Purchases (at sales price)||88,700|
|Markups||11,100||Purchase returns (at cost)||3,000|
|Markup cancellations||1,300||Purchase returns (at sales price)||4,000|
|Markdowns||9,400||Beginning inventory (at cost)||34,808|
|Markdown cancellations||3,800||Beginning inventory (at sales price)||50,200|
|Freight on purchases||3,500|
Compute the ending inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)
Ending inventory using conventional retail inventory method $
Conventional Retail Inventory Method:
,Conventional retail inventory method values the inventory with the help of cost to retail price ratio.This method focuses on the relation between the cost of merchandise and its retail price. Unlike in cost method, the markups and markdowns are considered while computing the retail cost of goods available for sale.
Answer and Explanation:
The ending inventory under the conventional retail inventory method is computed below.
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from Financial Accounting: Help and ReviewChapter 1 / Lesson 6