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Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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Question

Presented below is information related to Sheffield Company.

	Cost	Retail
Beginning inventory	$374,710	$283,000
Purchases	1,393,000	2,165,000
Markups		93,800
Markup cancellations		16,500
Markdowns		37,300
Markdown cancellations		4,500
Sales revenue		2,181,000

Compute the inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Ending inventory using conventional retail inventory method

$enter the dollar amount of the ending inventory using conventional retail inventory method

Expert Solution

PART 1

Sheffield Company :

S.no		Cost ($)	Retail ($)
1	Beginning Inventory	374,710	283,000
2	Purchases	1,393,000	2,165,000
3	Markups		93,800
4	Markups cancellation		(16,500)
5	Inventory after markups	1,767,710	2,525,300
6	Markdowns		(37,300)
7	Markdowns cancellation		4,500
8	Retail after markdown		2,492,500
9	Sales		2,181,000
10	Inventory at retail		311,500
		1,767,710

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