![INTERMEDIATE ACCOUNTING(LL)-W/CONNECT](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260216141/9781260216141_smallCoverImage.gif)
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 9, Problem 9.16E
To determine
Conventional Retail Method: Conventional retail method refers to the estimation of the lower of average cost or market by eliminating the markdowns from the calculation of the cost-to-retail percentage.
In this case, the cost-to-retail percentage will be determined by dividing the goods available for sale at cost by the goods available for at retail (excluding markdowns). Thus, the conventional retail method will always result in lower estimation of ending inventory when the markdowns exist.
To estimate: the ending inventory and cost of goods sold for 2018 applying the conventional retail method.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Beg Inv @ cost $11,160
Net Additional markups $600
Sales $94,056
Purchases @ retail $92,400
Freight-in $840
Beg Inv @ retail $18,000
Purchases @ cost $54,600
Net markdowns $1,144
11. Lets assume they employ the LIFO retail method at time of stable prices. What is the ending inventory at retail if using the LIFO retail?
Thank you
Brenda
Required information Problem 9-9 (Algo) Retail method-average cost and conventional [LO9-3, 9-4] Skip to question [The following information applies to the questions displayed below.] Smith-Kline Company maintains inventory records at selling prices
as well as at cost. For 2024, the records indicate the following data: ($ in thousands) Cost Retail Beginning inventory S 89 $ 134 Purchases 680 1,015 Freight-in on purchases 39 Purchase returns 1 2 Net markups 4 Net markdowns 8 Net sales 925 Problem 9-
9 (Algo) part 2 2. Use the retail method to approximate cost of ending inventory valued under conventional method. Note: Enter your answer in thousands including 2 decimal places, i.e. 12,550 would be 12.55.
Beginning inventory
Purchases
Freight on purchases
Markups
Markup cancellations
Abnormal shortage
Markdowns
Markdown cancellations
Employee discounts
Sales revenue
Sales returns
Normal shortage
Purchase returns
Cost
$457,000
1,606,000
78,400
17,300
22,840
Compute ending inventory by the conventional retail inventory method. Round percentages to 2 decimals.
Retail
$730,000
3,114,000
174,000
137,200
28,480
93,720
12,050
6,438
3,505,000
104,000
17,400
42,470
Chapter 9 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
Ch. 9 - Explain the (a) lower of cost or net realizable...Ch. 9 - What are the various levels of aggregation to...Ch. 9 - Describe the alternative approaches for recording...Ch. 9 - Explain the gross profit method of estimating...Ch. 9 - The Rider Company uses the gross profit method to...Ch. 9 - Explain the retail inventory method of estimating...Ch. 9 - Both the gross profit method and the retail...Ch. 9 - Define each of the following retail terms: initial...Ch. 9 - Explain how to estimate the average cost of...Ch. 9 - Prob. 9.10Q
Ch. 9 - Explain the LIFO retail inventory method.Ch. 9 - Discuss the treatment of freight-in, net markups,...Ch. 9 - Explain the difference between the retail...Ch. 9 - Prob. 9.14QCh. 9 - Prob. 9.15QCh. 9 - Explain the accounting treatment of material...Ch. 9 - It is discovered in 2018 that ending inventory in...Ch. 9 - Identify any differences between U.S. GAAP and...Ch. 9 - (Based on Appendix 9) Define purchase commitments....Ch. 9 - (Based on Appendix 9) Explain how purchase...Ch. 9 - Lower of cost or net realizable value LO91 Ross...Ch. 9 - Lower of cost or net realizable value LO91 SLR...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.5BECh. 9 - Gross profit method; solving for unknown LO92...Ch. 9 - Retail inventory method; average cost LO93 Kiddie...Ch. 9 - Retail inventory method; LIFO LO93 Refer to the...Ch. 9 - Conventional retail method LO94 Refer to the...Ch. 9 - Conventional retail method LO94 Roberson...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Dollar-value LIFO retail LO95 This exercise is a...Ch. 9 - Change i n inventory costing methods LO96 In...Ch. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Inventory error LO97 In 2018, Winslow...Ch. 9 - Inventory error LO97 Refer to the situation...Ch. 9 - Lower of cost or net realizable value LO91 Herman...Ch. 9 - Lower of cost or net realizable value LO91 The...Ch. 9 - Lower of cost or net realizable value LO91 Tatum...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Lower of cost or market LO91 [This is a variation...Ch. 9 - Prob. 9.8ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.10ECh. 9 - Gross profit method LO92 Royal Gorge Company uses...Ch. 9 - Prob. 9.12ECh. 9 - Retail inventory method; average cost LO93 San...Ch. 9 - Prob. 9.14ECh. 9 - Retail inventory method; LIFO LO93 Crosby Company...Ch. 9 - Prob. 9.16ECh. 9 - Conventional retail method; employee discounts ...Ch. 9 - Retail inventory method; solving for unknowns ...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Prob. 9.20ECh. 9 - Dollar-value LIFO retail LO95 Lance-Hefner...Ch. 9 - Prob. 9.22ECh. 9 - Change in inventory costing methods LO96 In 2018,...Ch. 9 - Prob. 9.24ECh. 9 - Error correction; inventory error LO97 During...Ch. 9 - Prob. 9.26ECh. 9 - Inventory error LO97 In 2018, the internal...Ch. 9 - Inventory errors LO97 In 2018, the controller of...Ch. 9 - Concepts; terminology LO91 through LO97 Listed...Ch. 9 - Prob. 9.30ECh. 9 - Prob. 9.31ECh. 9 - Lower of cost or net realizable value LO91 Decker...Ch. 9 - Prob. 9.2PCh. 9 - Lower of cost or market LO91 Forester Company has...Ch. 9 - Prob. 9.4PCh. 9 - Prob. 9.5PCh. 9 - Prob. 9.6PCh. 9 - Retail inventory method; conventional and LIFO ...Ch. 9 - Prob. 9.8PCh. 9 - Prob. 9.9PCh. 9 - Dollar-value LIFO retail method LO95 [This is a...Ch. 9 - Dollar-value LIFO retail LO95 On January 1, 2018,...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Retail inventory method; various applications ...Ch. 9 - Prob. 9.14PCh. 9 - Inventory errors LO97 You have been hired as the...Ch. 9 - Inventory errors LO97 The December 31, 2018,...Ch. 9 - Integrating problem; Chapters 8 and 9; inventory...Ch. 9 - Purchase commitments Appendix In November 2018,...Ch. 9 - Judgment Case 91 Inventoriable costs; lower of...Ch. 9 - Integrating Case 93 FIFO and lower of cost or net...Ch. 9 - Prob. 9.4BYPCh. 9 - Prob. 9.5BYPCh. 9 - Prob. 9.6BYPCh. 9 - Prob. 9.7BYPCh. 9 - Real World Case 98 Various inventory issues;...Ch. 9 - Prob. 9.9BYPCh. 9 - Judgment Case 910 Inventory errors LO97 Some...Ch. 9 - Ethics Case 911 Overstatement of ending inventory ...Ch. 9 - Analysis Case 912 Purchase commitments Appendix...Ch. 9 - Continuing Cases Target Case LO93, LO94, LO95...Ch. 9 - Prob. 1CCIFRS
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.Similar questions
- Problem 9-9 (Algo) Retail method-average cost and conventional [LO9-3, 9-4] Smith - Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data: ($ in thousands) Cost Retail Beginning inventory $ 84 $ 129 Purchases 675 1,010 Freight - in on purchases 34 Purchase returns 2 3 Net markups 5 Net markdowns 9 Net sales 920 Problem 9-9 (Algo) Part 1 Required: 1. Use the retail method to approximate cost of ending inventory valued under average cost method. Note: Enter your answer in thousands including 2 decimal places, i. e. 12, 550 would be 12.55.arrow_forwardBeg Inv @ cost $11,160 Net Additional markups $600 Sales $94,056 Purchases @ retail $92,400 Freight-in $840 Beg Inv @ retail $18,000 Purchases @ cost $54,600 Net markdowns $1,144 7. Use same factors above but use the Conventional LCM Retail Inventory Method. What is the Ending Inventory at Retail? Thank you Brendaarrow_forwardExerolse 2 Retail Inventory Meilhnd: Average LCM. A department store's accounts. showed the following ai'ıhe end of the period (in 000's): At Retail P160 AI Cost P120 Beginning inventory Purchases 270 340 430 Sales 60 Markdowns Markdown cancellations Additional markups Additionnl markup cancellations 10 120 20 Using the above data, apply the retail inventory method to compute the approximate average cost (1.CM) for the ending inventory.arrow_forward
- Beg Inv @ cost $11,160 Net Additional markups $600 Sales $94,056 Purchases @ retail $92,400 Freight-in $840 Beg Inv @ retail $18,000 Purchases @ cost $54,600 Net markdowns $1,144 14. How much is Ending inventory at cost using the LIFO retail method? Thank you Brendaarrow_forwarddo not copy Sales revenue Freight in Beginning inventory Purchases discounts 44,000 75,000 20,000 44,000 Sales returns and allowances 99,000 Operating expenses Ending inventory 72,000 415,000 Purchases Sales discounts 25,000 William Browning, withdrawals 61,000 Purchase returns and allowances 36,000 A. The total cost of goods available for sale B.The cost of goods sold is:arrow_forwardDrill Problem 15-3 (Algo) [LU 15-1 (2)] Given the following: January 1 Inventory April 1 June 1 November 1 Cost of ending inventory Number purchased 51 71 Cost of goods sold 61 66 249 Cost per unit 6 7 Total $ 153 426 427 Required: a. Calculate the cost of ending inventory using the FIFO (ending inventory shows 72 units). $ 1,834 b. Calculate the cost of goods sold using the FIFO (ending inventory shows 72 units).arrow_forward
- Problem 6-2AA (Static) Periodic: Alternative cost flows LO P3 [The following information applies to the questions displayed below.] Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March Date March 1 March S March 9 March 18 March 25 March 29 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Sales Less: Cost of goods sold Gross profit $ $ FIFO For specific identification, units sold include 80 units from beginning inventory, 340 units from the March 5 purchase, 40 units from the March 18 purchase, and 120 units from the March 25 purchase. 50,900 $ Units Acquired at Cost 100 units@ $50 per unit 400 units @ $55 per unit Problem 6-2AA (Static) Part 4 4. Compute gross profit earned by the company for each of the four costing methods. Note: Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar. 50,900 $ 120 units@ $60 per unit 200 units@ $62 per unit…arrow_forwardRequired information Problem 5-2AA (Static) Periodic: Alternative cost flows LO P3 [The following information applies to the questions displayed below.] Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18 March 25 March 29 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Units Acquired at Cost @$50 per unit @ $55 per unit Problem 5-2AA (Static) Part 3 100 units 400 units 120 units 200 units 820 units @$60 per unit @ $62 per unit Units Sold at Retail 420 units @ $85 per unit 160 units @ $95 per unit 580 units For specific identification, units sold include 80 units from beginning inventory, 340 units from the March 5 purchase, 40 units from the March 18 purchase, and 120 units from the March 25 purchase. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round your…arrow_forwardBeg Inv @ cost $11,160 Net Additional markups $600 Sales $94,056 Purchases @ retail $92,400 Freight-in $840 Beg Inv @ retail $18,000 Purchases @ cost $54,600 Net markdowns $1,144 2. What is the ending inventory at retail using the Average (cost) method? 3. What value is the cost ratio? (use 3 decimal places) 4. Which retail inventory method excludes markups but includes markdowns in calculating the cost ratio? (LIFO Retail Method, Average Cost Method, LCM Conventional Method or none of these) 6. If Ending Inv at retail had been found to be $16,000 (it wasn't pretend it was) then using the correct cost ratio, what amount of inventory would show up on the balance sheet assuming they are using the Average Cost Method? Question 5 isn't revelent for this question, they didn't have any transfers for this question 5. Assume that they also transferred in inventory from a different division with a cost of $8,500 and a retail value of $16,000. What would the cost ratio be, if this had…arrow_forward
- Question 4: Presented below is information related to ABC company as at 31/12/208. Cost Retail Beginning inventory € 200,000 € 280,000 Purchases 1,425,000 2,140,000 Markups Markup cancellations 95,000 15,000 Markdowns 35,000 Markdown cancellations 5,000 Sales 2,250,000 Required: Compute the ending inventory at cost as of 31/12/2018 using: a) Conventional retail method b) Cost methodarrow_forwardBeg Inv @ cost $11,160 Net Additional markups $600 Sales $94,056 Purchases @ retail $92,400 Freight-in $840 Beg Inv @ retail $18,000 Purchases @ cost $54,600 Net markdowns $1,144 6. If Ending Inv at retail had been found to be $16,000 (it wasn't pretend it was) then using the correct cost ratio, what amount of inventory would show up on the balance sheet assuming they are using the Average Cost Method? Question 5 isn't revelent for this question, they didn't have any transfers for this question Thank you Brendaarrow_forwardRequired information Problem 5-1A (Algo) Perpetual: Alternative cost flows LO P3 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18. March 25 March 29 Gross Margin Sales Less: Cost of goods sold Gross profit Beginning inventory Purchase Sales Purchase Purchase. Activities Sales Totals $ $ FIFO Problem 5-1A (Algo) Part 4 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, units sold include 120 units from beginning inventory, 250 units from the March 5 purchase, 100 units from the March 18 purchase, and 140 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) 40,570 $ 25.220 15,350 $ Units Acquired at Cost 210 units @ $53.20 per unit 280 units $58.20 per unit LIFO…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License