Ch9_12sol_071706 - Practice Exam Chapters 9-12 Solutions...

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Unformatted text preview: Practice Exam Chapters 9-12 Solutions Problem I Cost Retail Beginning inventory $138,860 $262,000 Plus: Net purchases 239,000 413,020 Net markups 12,000 Less: Net markdowns (4,000 ) Goods available for sale (excluding beginning inventory) 239,000 421,020 Goods available for sale (including beginning inventory) 377,860 683,020 $138,860 Base year cost-to-retail percentage: ------------ = 53% $262,000 $239,000 2006 cost-to-retail percentage: ------------- = 56.77% $421,020 Less: Net sales (390,000) Normal shortage (5,000 ) Estimated ending inventory at current year retail prices $288,020 Estimated ending inventory at cost (below) (147,682 ) Estimated cost of goods sold $230,178 Step 1 Step 2 Step 3 Ending Ending Inventory Inventory Inventory Inventory Layers Layers at Year-end at Base Year at Base Year Converted to Retail Prices Retail Prices Retail Prices Cost $288,020 $288,020 ------------ = $276,942 $262,000 (base) x 1.00 x 53% = $138,860 (above) 1.04 14,942 (2006) x 1.04 x 56.77% = 8,822...
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Ch9_12sol_071706 - Practice Exam Chapters 9-12 Solutions...

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