Question

The following data concerning the retail inventory method are taken from the financial records of Ivanhoe Company.

Cost Retail
Beginning Inventory $201,000 $278,000
Purchases 889,000 1,280,000
Freight-in 23500 -----
Net markups ----- 78700
Net markdowns ----- 56200
Sales ----- 1,334,000
The ending inventory at retail should be:________
a. $270000.
b. $246500.
c. $326200.
d. $302700.

Answer 1

B. $246,500

Step-by-step explanation:

Retail Cost

Beginning inventory

$278,000 $201,000

Purchases

$1,280,000. $889,000

Freight-in

--- $23,500

Net markups

$78,700

Net markdown

$56,200

Sales

$1,334,000

Ending inventory at retail would be;

= Beginning inventory + Purchases + Net markups - Net markdowns - Sales

= $278,000 + $1,280,000 + $78,700 -

$56,200 - $1,334,000

=$246,500