Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.17E
Conventional retail method; employee discounts
• LO9–3, LO9–4
LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2018:
| Cost | Retail | |
| Beginning inventory | $ 40,000 | $ 60,000 |
| Purchases | 207,000 | 400,000 |
| Freight-in | 14,488 | |
| Purchase returns | 4,000 | 6,000 |
| Net markups | 5,800 | |
| Net markdowns | 3,500 | |
| Normal breakage | 6,000 | |
| Net sales | 280,000 | |
| Employee discounts | 1,800 |
Sales are recorded net of employee discounts.
Required:
1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method.
2. Recompute the cost-to-retail percentage using the average cost method.
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HW Q 4
Current Attempt in Progress
At the end of Bridgeport Department Store’s fiscal year on November 30, 2020, these accounts appeared in its adjusted trial balance.
Freight-In
$ 7,500
Inventory
39,400
Purchases
578,500
Purchase Discounts
6,600
Purchase Returns and Allowances
2,900
Sales Revenue
1,044,700
Sales Returns and Allowances
17,000
Additional facts:
1.
Merchandise inventory on November 30, 2020, is $ 53,800.
2.
Bridgeport Department Store uses a periodic system.
Prepare an income statement through gross profit for the year ended November 30, 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
BRIDGEPORT DEPARTMENT STOREIncome Statement (Partial)choose the accounting period
select an opening name for section one
enter an income statement item
$ enter a dollar amount…
Chapter 9 Solutions
Intermediate Accounting
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