Answer:
Ending inventory at cost $30,360
Explanation:
The computation of the ending inventory at cost using conventional retail method is shown below:
<u>Particulars Cost Retail Cost to retail ratio </u>
beginning inventory $12,000 $20,000
Add: purchase $120,000 $170,000
Add:Net markups $10,000
Less: net markdown -$7,000
Goods available for sale $132,000 $193,000
Cost to retail percentage 66% ($132,000 ÷ $200,000)
Less: net sales $147,000
Estimated ending inventory at retail $46,000
Ending inventory at cost $30,360
($46,000 ×0.66)
