Question 1 (20 marks) Presented below is information related to ASAP Inc. in 2019: Cost Retail Inventory, 31 December 2018 $375,000 $ 550,000 Purchases 1,369,000 2,050,000 Purchase returns 90,000 120,000 Purchase discounts 27,000 Gross sales (after employee discounts) 2,110,000 Sales returns 145,000 Markups 180,000 Markup cancellations 60,000 Markdowns 65,000 Markdown cancellations 30,000 Freight-in 63,000 Employee discounts granted 12,000 Loss from breakage (normal) 8,000 Required: (a) Assuming that ASAP Inc. uses the conventional retail inventory method, (i) calculate the cost-to-retail ratio; (5 marks) (ii) calculate the ending inventory at retail at 31 December 2019; (4 marks) (iii) calculate the cost of its ending inventory at 31 December 2019. (1 mark) (iv) describe the accounting features of the retail inventory method. (3 marks) (b) As at 30 June 2020, ASAP Inc. has conducted a physical inventory count and revealed some unfinished inventory with a cost of $900. Expected selling price of finished inventory is $1,000, ASAP Inc. expects to incur an additional cost of completion of $50 and selling cost of $200. (i) Calculate the net reasliable value of the unfinished inventory for ASAP Inc. as at 30 June 2020 and the loss of inventory write-down for the year ended at 30 June 2020. (3 marks) (ii) Prepare the journal entries required at 30 June 2020 assuming that the inventory is recorded at LCNRV, using a perpetual inventory system and the cost-of-goods-sold method; (2 marks) (iii) Prepare the journal entries required at 30 June 2020 assuming that the inventory is recorded at cost, using a perpetual system and the loss method. (2 marks) [Total for Question 1: 20 marks]