Question

Presented below is information related to Coronado Company. Cost Retail Beginning inventory $318,504 $279,000 Purchases 1,363,000 2,117,000 Markups 93,200 Markup cancellations 16,400 Markdowns 38,300 Markdown cancellations 5,500 Sales revenue 2,158,000.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.)

Answer 1

Ending Inventory 194,426

Step-by-step explanation:

cost retail

Beginning Inventory 318,504 279,000

purchases 1,363,000 2,117,000

net markup 76,800

net markdown -32,800

Available 1,681,504 2,440,000

cost to retail ratio: 1,681,504 / 2440,000 = 0.689140984 = .6891

COGS: sales revenue x cost to retail ratio

2,158,000 x .6891 = 1,487,077.8‬

Ending Inventory:

Available for sales less COGS

1,681,504 - 1,487,077.8 = 194,426.2‬

Ending Inventory 194,426