Question

Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2021: Cost Retail Merchandise inventory, January 1, 2021 $ 300,000 $ 291,000 Purchases 581,000 928,000 Freight-in 19,000 Net markups 31,000 Net markdowns 5,000 Net sales 910,000 Required: Determine the December 31, 2021, inventory by applying the conventional retail method using the information provided. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign.)

Answer 1

Answer:

$242,168.82

Explanation:

Inventory on December 31, 2021

Cost. Retail

Beginning inventory 300,000 291,000

Add: purchases 581,000 928,000

Add: freight in. 19,000

Add: net markups. 31,000

900,000 1,250,000

Less net markdown. 5,000

Goods available for 900,000 1,245,000

Cost to retail %

900,000/1,245,000

0.722891566

Less: net sales. 910,000

Estimated ending 335,000

Estimated ending inventory at cost

335,000 × 0.722891566

242,168.82