Question

Ivanhoe Inc. uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $383500 ($584000), purchases during the current year at cost (retail) were $3208000 ($4993600), freight-in on these purchases totaled $149500, sales during the current year totaled $4466000, and net markups were $404000. What is the ending inventory value at cost? Hint: Round intermediate calculation to 3 decimal places, e.g. 0.635 and final answer to 0 decimal places.

Answer 1

$962406

Step-by-step explanation:

Calculation to determine the ending inventory value at cost

Ending inventory value at cost=

($584000 + $4993600 + $404000 - $4466000)

*[($383500 + $3208000 + $149500) ÷ ($584000 + $4993600 + $404000)]

Ending inventory value at cost=$1,515,600*($3,741,000÷$5,891,600)

Ending inventory value at cost=$1,515,600*0.635

Ending inventory value at cost=$962406

Therefore the ending inventory value at cost is $962406