Dixon Books uses the retail inventory method to estimate its monthly ending inventories. The following information is available for two of its departments at October 31, 2015.
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Hardcover
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Paperbacks
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Cost
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Retail
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Cost
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Retail
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Beginning inventory
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$777,000
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$1,295,000
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$518,000
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$666,000
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Purchases
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3,949,750
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5,920,000
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2,136,750
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2,849,000
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Freight-in
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44,400
|
---
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22,200
|
---
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Purchase discounts
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81,400
|
---
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40,700
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---
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Net sales
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5,735,000
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2,904,500
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At December 31, Dixon Books takes a physical inventory at retail. The actual retail values of the inventories in each department are Hardcover $1,461,500, and Paperbacks $619,750.
Determine the cost-to-retail ratio. (Round answers to 1 decimal place, e.g. 25.5%.)
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Hard covers
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Paperbacks
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______%
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______%
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Determine the estimated cost of the ending inventory for each department at October 31, 2015, using the retail inventory method. (Round answers to 0 decimal place, e.g. 25,120.)
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Hardcovers
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Paperbacks
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The estimated cost of the ending inventory
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$______
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$______
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Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios for the year are 64% for Hard covers and 77% for Paperbacks. (Round answers to 0 decimal places, e.g. 25,120.)
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Hardcover
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Paperbacks
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The ending inventory
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$______
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$______
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