# Hoover 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 a)   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 of \$ Answer  and retail of \$ Answer  respectively. b)   The ending inventory at retail should be \$ Answer  c)    The approximate cost of the ending inventory by the conventional retail method is \$ Answer

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Hoover 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

a)   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 of \$ Answer

respectively.

b)   The ending inventory at retail should be \$ Answer

c)    The approximate cost of the ending inventory by the conventional retail method is \$ Answer

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Step 1

a. Compute the total cost of ending inventory under lower of average cost or market method:

Step 2

b. Compute the ending inventory at retail:

Step 3

c. Compute the approximate cost of the ending inventory ...

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