Harmes Company is a clothing store that uses the retail inventory method. The following information relates to
Question:
Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during 2016:
Cost | Retail | |
---|---|---|
Inventory, January 1 | $28,700 | $41,000 |
Purchases | 68,500 | 101,100 |
Markups (net) | — | 2,400 |
Markdowns (net) | — | 200 |
Sales | — | 79,000 |
Required:
1. Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO. Round the cost-to-retail ratio to three decimal places. If necessary, round dollar amounts to the nearest whole dollar.
HARMES COMPANY | ||
Calculation of ending inventory by retail inventory method | ||
FIFO 2016 | ||
Cost | Retail | |
Purchases | $ | $ |
Add: Markups (net) | ||
Less: Markdowns (net) | ||
$ | $ | |
Add: Beginning inventory | ||
Goods available for sale | $ | $ |
Less: Sales | ||
Ending inventory at retail | $ | |
Ending inventory at cost | $ | |
2. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Average cost. Round the cost-to-retail ratio to three decimal places. If necessary, round dollar amounts to the nearest whole dollar.
HARMES COMPANY | ||
Calculation of ending inventory by retail inventory method | ||
Average Cost 2016 | ||
Cost | Retail | |
Beginning inventory | $ | $ |
Purchases | ||
Add: Markups (net) | ||
Less: Markdowns (net) | ||
Goods available for sale | $ | $ |
Less: Sales | ||
Ending inventory at retail | $ | |
Ending inventory at cost | $ |
3. Compute the ending inventory by the retail inventory method for the following cost flow assumption: LIFO. Round the cost-to-retail ratio to three decimal places. If necessary, round dollar amounts to the nearest whole dollar.
HARMES COMPANY | ||
Calculation of ending inventory by retail inventory method | ||
LIFO 2016 | ||
Cost | Retail | |
$ | $ | |
$ | ||
$ | $ | |
$ | ||
Ending inventory at LIFO cost | ||
Beginning layer (as stated in data) | $28,700 | |
New layer | ||
Total | $ |
4. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Lower of cost or market (based on average cost). Round the cost-to-retail ratio to three decimal places. If necessary, round dollar amounts to the nearest whole dollar.
HARMES COMPANY | ||
Calculation of ending inventory by retail inventory method | ||
Lower of Cost or Market (based on average cost) 2016 | ||
Cost | Retail | |
$ | $ | |
$ | $ | |
$ |
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones