Question Details

The approximate cost of the ending inventory by the conventional retail method 



1.	Goren Corporation had the following amounts, all at retail:
Beginning inventory	$  3,600	Purchases	$100,000
Purchase returns	6,000	Net markups	18,000
Abnormal shortage	4,000	Net markdowns	2,800
Sales	72,000	Sales returns	1,800
Employee discounts	1,600	Normal shortage	2,600
	What is Goren- ending inventory at retail?
a.	$34,400.
b.	$36,000.
c.	$37,600.
d.	$38,400

Use the following information for questions 2 through 4.

Plank Co. uses the retail inventory method. The following information is available for the current year.
			   Cost		   Retail	
	Beginning inventory	$  78,000	$122,000
	Purchases	295,000	415,000
	Freight-in	5,000	—
	Employee discounts	—	2,000
	Net markups	—	15,000
	Net Markdowns	—	20,000
	Sales		—	390,000

2.	If the ending inventory is to be valued at approximately lower-of-average-cost-or-net realizable value, the calculation of the cost ratio should be based on cost and retail of
a.	$300,000 and $430,000.
b.	$300,000 and $428,000.
c.	$373,000 and $550,000.
d.	$378,000 and $552,000.

	3.	The ending inventory at retail should be
a.	$160,000.
b.	$150,000.
c.	$144,000.
d.	$140,000.

	4.	The approximate cost of the ending inventory by the conventional retail method is
a.	$95,900.
b.	$94,920.
c.	$98,000.
d.	$102,480.




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