AC301_Unit 3_Inventories_Special_Valuation_Issues_Finley_Joey

AC301_Unit 3_Inventories_Special_Valuation_Issues_Finley_Joey

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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: Joey D. Finley 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)....
View Full Document

Page1 / 12

AC301_Unit 3_Inventories_Special_Valuation_Issues_Finley_Joey

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online