Question

When you undertook the preparation of the financial statements for Telfer Company at January 31, 2018, the following data were available:

At Cost At Retail
Inventory, February 1, 2017 70,800.00 98,500.00
Markdowns 35,000.00
Markups 63,000.00
Markdown cancellations 20,000.00
Markup cancellations 10,000.00
Purchases 219,500.00 294,000.00
Sales revenue 335,000.00
Purchases returns and allowances 4,300.00 5,500.00
Sales returns and allowances 10,000.00

Compute the ending inventory at cost as of January 31, 2018, using the Conventional Retail method. Your solution should be in good form with amounts clearly labeled.

Answer 1

Step-by-step explanation:

Cost Retail - - - - - - - - - - At Cost - - - -At Retail

Inventory(1/2/17)-------- 70,800 - - - - 98,500

Purchases - - - - - - - - - 219,500 - - - -294,000

Less:Purchases returns 4,300 - - - - 5500

Add: NetMarkup - - - - - - - - - - - - - - - 53000

Total - - - - - - - - - - - - 286,000-------- 440,000

Cost-to-retail percentage = 286000/440000

Cost-to-retail percentage = 65%

Markups 63,000.00

Markdown cancellations 20,000.00

Markup cancellations 10,000.00

Purchases 219,500.00 294,000.00

Sales revenue 335,000.00