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LesleyChubick_AC301-01_Unit3_Assignment_Accounting2

# LesleyChubick_AC301-01_Unit3_Assignment_Accounting2 - The...

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Unformatted text preview: The Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during 2010: Cost Retail Inventory, January 1 \$28,400 \$40,200 Purchases 65,200 100,000 Markups (net)- 1,900 Markdowns (net)- 400 Sales- 80,000 Required 1. FIFO 2. Average cost 3. LIFO 4. Lower of cost or market (based on average cost) E9-10 Retail Inventory Method Round Cost-to-Retail Ratio to three decimal places and Ending Inventory at Cost to the nearest dollar . Compute the ending inventory by the retail inventory method for the following cost flow assumptions: Name: Lesley Chubick An asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s). If you are still getting a red asterisk, and think the answer is correct, but used a formula in the cell try manually typing in the answer according to the rounding instructions. Required 1. FIFO Cost Retail Purchases \$65,200 \$100,000 Markups (net) 1,900 Markdowns (net) (400) \$65,200 \$101,500 Cost-to-retail ratio calculation: 65,200 0.642 (for purchases) 101,500 Beginning inventory 28,400 40,200 Goods available for sale \$93,600 \$141,700 Less: Sales (80,000) Ending inventory at retail \$61,700 x = Ending inventory at cost 0.642 61,700 \$39,611 2. Average cost Cost Retail Beginning inventory \$28,400 \$40,200 Purchases 65,200 100,000 Markups (net) 1,900 Markdowns (net) (400) Goods available for sale \$93,600 \$141,700 Cost-to-retail ratio calculation: 93,600 0.661 (for goods available for sale) 141,700 Less: Sales (80,000) Ending inventory at retail \$61,700 x = Ending inventory at cost 0.661 61,700 \$40,784 3. LIFO Cost Retail Beginning inventory \$28,400 \$40,200 Cost-to-retail ratio calculation: 28,400 0.706 (for beginning inventory) 40,200 Purchases \$65,200 \$100,000 Markups (net) 1,900 Markdowns (net) (400) \$65,200 \$101,500 Cost-to-retail ratio calculation: 65,200 0.642 (for purchases) 101,500 Goods available for sale \$93,600 \$141,700 Less: Sales (80,000) Ending inventory at retail \$61,700 x = beginning layer 0.706 40,200 28,400 new layer 0.642 21,500 13,803 Ending inventory at cost \$42,203 4. Lower of cost or market (based on average cost) Cost Retail Beginning inventory \$28,400 \$40,200 Purchases 65,200 100,000 Markups (net) 1,900 \$93,600 \$142,100 Cost-to-retail ratio calculation: 93,600 0.659 142,100 Markdowns (net) (400) Goods available for sale \$141,700 Less: Sales (80,000) Ending inventory at retail \$61,700 x = Ending inventory at cost 0.659 61,700 \$40,660 E9-10 Retail Inventory Method Round Cost-to-Retail Ratio to three decimal places and Ending Inventory at Cost to the nearest dollar . Compute the ending inventory by the retail inventory method for the following cost flow assumptions: Cost-to-Retail Ratio Ending Inv. at Retail Ending Inv. at Cost Cost-to-Retail Ratio Ending Inv. at Retail Ending Inv. at Cost Cost-to-Retail Ratio Inventory at Retail Ending Inv. at Cost Cost-to-Retail Ratio Ending Inv. at Retail Ending Inv. at Cost Name: Solutions An asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s). If you are still gettingAn asterisk (*) will appear next to an incorrect amount(s) in the outlined cell(s)....
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LesleyChubick_AC301-01_Unit3_Assignment_Accounting2 - The...

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