Exercise 919 Presented below is information related to Ricky

Exercise 9-19 Presented below is information related to Ricky Henderson Company. Cost Retail Beginning inventory $ 217,874 $ 287,700 Purchases 1,438,000 2,142,000 Markups 95,200 Markup cancellations 16,000 Markdowns 40,100 Markdown cancellations 5,700 Sales revenue 2,256,000 Compute the inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using conventional retail inventory method

Solution

Cost Retail Beginning Inventory        217,874.00        287,700.00 Purchases    1,438,000.00    2,142,000.00 Total    1,655,874.00    2,429,700.00 Add: Net Markup Markups          95,200.00 Markup Cancellations        (16,000.00)          79,200.00 Totals    1,655,874.00    2,508,900.00 Less: Net Markdown Mardowns          40,100.00 Markdown Cancellations          (5,700.00)          34,400.00 Sales Price of Goods Available    2,474,500.00 Less: Sales    2,256,000.00 Ending Inventory at retail        218,500.00 Cost to Retail Ratio = $1,655,874 / $2,508,900 Cost to Retail Ratio = 66% Ending Inventory at Cost = $218,500 X 66% Ending Inventory at Cost = $144,210