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Hoover Co

Accounting

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Hoover Co. uses the retail inventory method. The following information is available for the current year.

                                            Cost                      Retail  

           Beginning inventory                                          $ 78,000              $122,000

           Purchases                                                           295,000                415,000

           Freight-in                                                                 5,000                      —

           Employee discounts                                                  —                       2,000

           Net markups                                                             —                     15,000

           Net markdowns                                                         —                     20,000

           Sales                                    —         390,000

 

a)  If the ending inventory is to be valued at approximately lower-of-average-cost-or-net realizable value, the calculation of the cost ratio should be based on cost of ? $_________ and retail of ?$_________ respectively.

 

b)  The ending inventory at retail should be? $ ____________

 

 

c)  The approximate cost of the ending inventory by the conventional retail method is _______ $