P6.11 Compute ending inventory using retailmethod.a. Hardcovers: End. Inv.$488,400*P6.11A (LO 6) Rayre Books uses the retail inventory method to estimate its monthly ending inventories.The following information is available for two of its departments at October 31, 2020.Beginning inventoryPurchasesFreight-inPurchase discountsNet salesHardcoversCost$ 420,0002,135,00024,00044,000Retail$ 640,0003,200,000Paperbacks3,100,000Cost$ 280,0001,155,00012,00022,000RetailS 360,0001,540,0001,570,000At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven-tories in each department are Hardcovers $744,000 and Paperbacks $335,000.Instructionsa. Determine the estimated cost of the ending inventory for each department at October 31, 2020, usingthe retail inventory method.b. Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios for the year are 65% for Hardcovers and 75% for Paperbacks.

The ending inventory is calculated as the difference between the cost of goods available for sale…

Compute ending inventory using retail P6.11A (LO 6) Rayre Books uses the retail inventory method to estimate its monthly ending inventories. method. The following information is available for two of its departments at October 31, 2020. Hardcovers Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 3,100,000 Paperbacks Cost $ 280,000 1,155,000 12,000 22,000 Retail $ 360,000 1,540,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000.

Compute ending inventory using retail P6.11A (LO 6) Rayre Books uses the retail inventory method to estimate its monthly ending inventories. method. The following information is available for two of its departments at October 31, 2020. Hardcovers Beginning inventory Purchases Freight-in Purchase discounts Net sales Cost $ 420,000 2,135,000 24,000 44,000 Retail $ 640,000 3,200,000 3,100,000 Paperbacks Cost $ 280,000 1,155,000 12,000 22,000 Retail $ 360,000 1,540,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inven- tories in each department are Hardcovers $744,000 and Paperbacks $335,000.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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