Terzi Department Store SA uses the retail inventory method to estimate its monthly ending inventories. The following
Question:
Terzi Department Store SA uses the retail inventory method to estimate its monthly ending inventories. The following information is available for two of its departments at August 31, 2017.
At December 31, Terzi Department Store takes a physical inventory at retail. The actual retail values of the inventories in each department are Sporting Goods €85,000, and Jewelry and Cosmetics €52,000.
Instructions
(a) Determine the estimated cost of the ending inventory for each department on August 31, 2017, using the retail inventory method.
(b) Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios are 60% for Sporting Goods and 54% for Jewelry and Cosmetics.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso