Question

Presented below is information related to Culver Company. Cost Retail Beginning inventory $292,298 $276,000 Purchases 1,389,000 2,153,000 Markups 95,800 Markup cancellations 15,400 Markdowns 37,500 Markdown cancellations 4,600 Sales revenue 2,196,000 Compute the inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using conventional retail inventory method $

Answer 1

Ending inventory cost = $187935

Step-by-step explanation:

Cost Retail

Beginning inventory $292,298 $276,000

Purchases $1,389,000 $2,153,000

total $1681298 $2429000

add ; Markups $95,800

less ; Markup cancellations $15,400

total $1681298 $2509400

less ; Markdowns $37,500

add; Markdown cancellations $4,600

Sales price of goods available $1681298 $2476500

less ;Sales revenue $2,196,000

Ending inventory retail $280500

so

cost retail ratio is

cost retail ratio =
`(1681298)/(2509400)` = 0.67 = 67 %

and

Ending inventory cost = 280500 × 67%

Ending inventory cost = $187935