Question

Crane Inc. uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $404500 ($605000), purchases during the current year at cost (retail) were $3628000 ($5413600), freight-in on these purchases totaled $170500, sales during the current year totaled $4886000, and net markups were $425000. 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

$1,015,555.2

Step-by-step explanation:

$605,000+$5,413,600+$425,000-$4,886,000

=$6,443 600-$4,886,000

=$1,557,600

($404,500+ $3,628,000+$170,500) ÷($605,000 +$5,413,600+$425,000)

=$4,203,000÷6,443,600

=0.652%

=1,557,600×0.652

=$1,015,555.2

Therefore the ending inventory value cost is $1,015,555.2