CH_9_BOOK_PROBLEMS_SOLUTIONS

# CH_9_BOOK_PROBLEMS_SOLUTIONS - EXERCISE 9-3(1520 minutes...

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EXERCISE 9-3 (15–20 minutes) Item No. Cost per Unit Replacement Cost Net Realizable Value Net Real. Value Less Normal Profit Designated Market Value LCM Quantity Final Inventory Value 1320 \$3.20 \$3.00 \$4.15* \$2.90** \$3.00 \$3.00 1,200 \$ 3,600 1333 2.70 2.30 2.90 2.40 2.40 2.40 900 2,160 1426 4.50 3.70 4.60 3.60 3.70 3.70 800 2,960 1437 3.60 3.10 2.75 1.85 2.75 2.75 1,000 2,750 1510 2.25 2.00 2.45 1.85 2.00 2.00 700 1,400 1522 3.00 2.70 3.50 3.00 3.00 3.00 500 1,500 1573 1.80 1.60 1.75 1.25 1.60 1.60 3,000 4,800 1626 4.70 5.20 5.50 4.50 5.20 4.70 1,000 4,700 *** \$23,870 *\$4.50 – \$.35 = \$4.15. **\$4.15 – \$1.25 = \$2.90. ***Cost is used because it is lower than designated market value

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EXERCISE 9-18 (20–25 minutes) (a) Cost Retail Beginning inventory ....................................... \$ 58,000 \$100,000 Purchases ........................................................ 122,000 200,000 Net markups .................................................... 20,000 Totals ...................................................... \$180,000 320,000 Net markdowns ............................................... (30,000 ) Sales price of goods available ...................... 290,000 Deduct: Sales ................................................. 186,000 Ending inventory at retail .............................. \$104,000 (b) 1. \$180,000 ÷ \$300,000 = 60% 2. \$180,000 ÷ \$270,000 = 66.67% 3. \$180,000 ÷ \$320,000 = 56.25% 4. \$180,000 ÷ \$290,000 = 62.07%
EXERCISE 9-18 (Continued) (c) 1. Method 3. 2. Method 3. 3. Method 3. (d) 56.25% X \$104,000 = \$58,500 (e) \$180,000 – \$58,500 = \$121,500 (f) \$186,000 – \$121,500 = \$64,500 EXERCISE 9-19 (12–17 minutes) Cost Retail Beginning inventory .......................... \$ 200,000 \$ 280,000 Purchases ........................................... 1,425,000 2,140,000 Totals ......................................... 1,625,000 2,420,000 Add: Net markups Markups .................................... \$95,000 Markup cancellations .............. _________ (15,000 ) 80,000 Totals ................................................... \$1,625,000 2,500,000 Deduct: Net markdowns Markdowns ................................ 35,000 Markdown cancellations .......... (5,000 ) 30,000 Sales price of goods available .......... 2,470,000 Deduct: Sales ....................................

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