Chapter 9-Inventories Additional Valuation Issues-LO 4&5-Comput

Dicer uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were £130,000 (£198,000), purchases during the current year at cost (retail) were £685,000 (£1,100,000), freight-in on these purchases totaled £43,000, sales during the current year totaled £1,050,000, and net markups (markdowns) were £24,000 (£36,000). What is the ending inventory value at cost?

• £153,164.

• £156,165.

• £157,412.

• £236,000.

Boxer Inc. uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were €65,500 (€99,000), purchases during the current year at cost (retail) were €568,000 (€865,600), freight-in on these purchases totaled €26,500, sales during the current year totaled €811,000, and net markups were €69,000. What is the ending inventory value at cost?

• €222,600.

• €174,366.

• €142,241.

• €152,308.

Barker Pet Supply uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were €265,600 (€326,900), purchases during the current year at cost (retail) were €1,068,600 (€1,386,100), freight-in on these purchases totaled €63,900, sales during the current year totaled €1,302,000, and net markups (markdowns) were €2,000 (€96,300). What is the ending inventory value at cost?

• €316,700.

• €258,111.

• €411,000.

• €246,667.

Crane Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year:

                                                             Cost          Retail 

Beginning inventory                               £  30,000       £  50,000

Purchases                                              145,000           200,000

Freight-in                                                   2,500           —  

Net markups                                                  —                        8,500

Net markdowns                                             —                      10,000

Employee discounts                                      —                        1,000

Sales                                                              —                    205,000

If the ending inventory is to be valued at the lower-of-cost-or-net realizable value, what is the cost to retail ratio?

• £177,500 ÷ £250,000

• £177,500 ÷ £258,500

• £175,000 ÷ £260,000

• £177,500 ÷ £248,500

The following data concerning the retail inventory method are taken from the financial records of Welch Company.

                                                                                          Cost                       Retail 

            Beginning inventory                                           €  49,000               €  70,000

            Purchases                                                           224,000                 320,000

            Freight-in                                                                 6,000                       —

            Net markups                                                               —                      20,000

            Net markdowns                                                          —                      14,000

            Sales                                                                          —                    336,000

 

            The ending inventory at retail should be

• €74,000.

• €60,000.

• €64,000.

• €42,000.

The following data concerning the retail inventory method are taken from the financial records of Welch Company.

                                                            Cost                       Retail 

Beginning inventory                       €  49,000               €  70,000

Purchases                                          224,000                 320,000

Freight-in                                          6,000                       —

Net markups                                       —                      20,000

Net markdowns                                   —                      14,000

Sales                                                       —                    336,000 

            If the ending inventory is to be valued at approximately the lower-of-cost-or-net realizable value, the calculation of the cost to retail ratio should be based on goods available for sale at (1) cost and (2) retail, respectively of

• €279,000 and €410,000.

• €279,000 and €396,000.

• €279,000 and €390,000.

• €273,000 and €390,000.

The following data concerning the retail inventory method are taken from the financial records of Welch Company.

                                                                 Cost                       Retail 

Beginning inventory                    €  49,000               €  70,000

Purchases                                          224,000                 320,000

Freight-in                                         6,000                       —

Net markups                                            —                      20,000

Net markdowns                                      —                      14,000

Sales                                                          —                    336,000 

If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to €54,000 at retail, the business has

• realized a windfall gain.

• sustained a loss.

• no gain or loss as there is close coincidence of the inventories.

• None of these choices are correct.

Drake Corporation had the following amounts, all at retail:

Beginning inventory               €  3,600         Purchases                         €120,000

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 Drake’s ending inventory at retail?

• €54,400.

• €56,000.

• €57,600.

• €58,400

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’s ending inventory at retail?

• £34,400.

• £36,000.

• £37,600.

•   £38,400

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

 

            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

• €300,000 and €430,000.

• €300,000 and €428,000.

• €373,000 and €550,000.

• €378,000 and €552,000.