Fuque Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2015.

Instructions

(a) Using the conventional retail method, prepare a schedule computing estimated LCNRV inventory for October 31, 2015.

(b) A department store using the conventional retail inventory method estimates the cost of its ending inventory as £60,000. An accurate physical count reveals only £47,000 of inventory at LCNRV. List the factors that may have caused the difference between the computed inventory and the physical count.

Transcribed Image Text:

Inventory, October 1, 2015 At cost At retail Purchases (exclusive of freight and returns) At cost 52,000 78,000 At retail Freight-in Purchase returns At cost At retail Markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales 272,000 423,000 16,600 5,600 8,000 9,000 2,000 3,600 10,000 390,000