*P6.11 (LO 6), AP 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, 2022. Hardcovers Paperbacks Cost Retail Cost Retail Beginning inventory $ 420,000 $ 640,000 $ 280,000 $ 360,000 Purchases 2,135,000 3,200,000 1,155,000 1,540,000 Freight-in 24,000 12,000 Purchase discounts 44,000 22,000 Net sales 3,100,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inventories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. a. Hardcovers: End. Inv. $488,400 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.
*P6.11 (LO 6), AP 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, 2022. Hardcovers Paperbacks Cost Retail Cost Retail Beginning inventory $ 420,000 $ 640,000 $ 280,000 $ 360,000 Purchases 2,135,000 3,200,000 1,155,000 1,540,000 Freight-in 24,000 12,000 Purchase discounts 44,000 22,000 Net sales 3,100,000 1,570,000 At December 31, Rayre Books takes a physical inventory at retail. The actual retail values of the inventories in each department are Hardcovers $744,000 and Paperbacks $335,000. Instructions a. Determine the estimated cost of the ending inventory for each department at October 31, 2022, using the retail inventory method. a. Hardcovers: End. Inv. $488,400 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.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 67P
Related questions
Question
Hi,
may you please help me please, thank you
Expert Solution
Step 1 Introduction
The cost to retail ratio is calculated as ratio of cost of goods available for sale at cost and cost of goods available for sale at retail.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub