Problemlemay department store uses the retail inventory, Ask an Expert

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Problem

LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2016:

	Cost	Retail
Beginning inventory	49,000	69,000
Purchases	216,000	409,000
Freight-in	25,920
Purchase returns	4,000	6,500
Net markups		6,700
Net markdowns		4,400
Normal breakage		6,500
Net sales		289,000
Employee discounts		2,700

Sales are recorded net of employee discounts.

Required:

1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.

Recompute the cost-to-retail percentage using the average cost method.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92740548

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