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The following information are given about indian Trading Co
The following information are given about indian Trading Co. Net sales $504,000: Net purchases $350.000 at retail price (cost $250.000): Markups $116,000: Markup cancellations $42.000 Markdowns 556.000; Markdown cancellations $22.000; Freight-in 530,000: Beginning inventory 5168,000 at retail price (cost $99.000). The company is using the retail method (the conventional method) REQUIRED: Calculate the following 1. The available for sale inventory at COST and at RETAIL 2. The net Markups and the net Markdowns 3. the cost-to-retail ratio. 4. Ending inventory at cost. For the toolban press ALT+F10 (PC or ALTEFN+F10 (Mac),
Expert Solution
Answer
- Working with Requirements asked
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Conventional Retail Method |
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Cost |
Retail |
Cost to Retail Ratio |
Working |
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Beginning Inventory |
$99,000.00 |
$168,000.00 |
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Plus: Purchases |
$250,000.00 |
$350,000.00 |
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Freight In |
$30,000.00 |
$0.00 |
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Net Markups [Answer #2] |
$0.00 |
$74,000.00 |
$116000 – 42000 |
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$379,000.00 |
$592,000.00 |
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Less: Net MarkDowns |
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$34,000.00 |
$ 56000 - 22000 |
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Goods Available for sale [Answer #1] |
$379,000.00 |
$558,000.00 |
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Cost to retail Percentage [Answer #3] |
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64.02% or 64% |
( 379000 / 592000 ) x 100 |
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Less: Net Sales |
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$504,000.00 |
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Estimated ending inventory at retail |
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$54,000.00 |
558000 - 504000 |
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Estimated ending Inventory at cost using conventional retail inventory method [Answer #4] |
$34,560. |
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54000 x 64% |
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