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    Problem 14-7

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    Angelita Dela cruz
    This document contains information about inventory costs and retail values for two different periods. For the first period, the beginning inventory at cost was $650,000 and at retail was $1,200,000. Various purchases, returns, allowances and transfers resulted in a Gross Average Stock of $9,600,000 at cost and $15-16 million at retail. The ending inventory was estimated to be $2.4-2.56 million at cost. For the second period, beginning inventory was $500,000 at cost and $770,000 at retail. Purchases, returns, discounts and transfers resulted in a Gross Average Stock of $3,570,000 at cost and $4.

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    Problem 14-7

    Uploaded by

    Angelita Dela cruz
    168 views2 pages
    This document contains information about inventory costs and retail values for two different periods. For the first period, the beginning inventory at cost was $650,000 and at retail was $1,200,000. Various purchases, returns, allowances and transfers resulted in a Gross Average Stock of $9,600,000 at cost and $15-16 million at retail. The ending inventory was estimated to be $2.4-2.56 million at cost. For the second period, beginning inventory was $500,000 at cost and $770,000 at retail. Purchases, returns, discounts and transfers resulted in a Gross Average Stock of $3,570,000 at cost and $4.

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    problem 14-7

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    This document contains information about inventory costs and retail values for two different periods. For the first period, the beginning inventory at cost was $650,000 and at retail was $1,200,000. Various purchases, returns, allowances and transfers resulted in a Gross Average Stock of $9,600,000 at cost and $15-16 million at retail. The ending inventory was estimated to be $2.4-2.56 million at cost. For the second period, beginning inventory was $500,000 at cost and $770,000 at retail. Purchases, returns, discounts and transfers resulted in a Gross Average Stock of $3,570,000 at cost and $4.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    168 views2 pages

    Problem 14-7

    Uploaded by

    Angelita Dela cruz
    This document contains information about inventory costs and retail values for two different periods. For the first period, the beginning inventory at cost was $650,000 and at retail was $1,200,000. Various purchases, returns, allowances and transfers resulted in a Gross Average Stock of $9,600,000 at cost and $15-16 million at retail. The ending inventory was estimated to be $2.4-2.56 million at cost. For the second period, beginning inventory was $500,000 at cost and $770,000 at retail. Purchases, returns, discounts and transfers resulted in a Gross Average Stock of $3,570,000 at cost and $4.

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    Problem 14-7

    Cost Retail

    Beginning Inventory 650,000 1,200,000

    Purchase 9,000,000 14,700,000

    Purchase returns (300,000) (500,000)

    Purchase allowances (150,000)

    Freight -in 200,000

    Departmental transfer in 200,000 300,000

    Net Markup _____________ 300,000

    GAS - Conservative 9,600,000 16,000,000

    Cost ratio (9,600,000 / 16,000,000) = 0.60

    Markdown 1,000,000

    GAS - Average 9,600,000 15,000,000

    Cost ratio (9,600,000/ 15,000,000) = 0. 64

    Less: Sales 9,500,00

    Employee discount 500,000

    Estimated normal shoplifting losses 600,000

    Estimated normal shrinkage 400,000 11,000,000

    Ending inventory at retail 4,000,000

    Conservative cost ( 4,000,000 x 0.60) A. 2,400,000

    Average cost (4,000,000 x 0.64) A. 2,560,000


    Problem 14-8

    Cost Retail

    Beginning Inventory 500,000 770,000

    Purchase 3,070,00 4,700,000

    Transportation -in 70,000

    Purchase discount ( 45,000 )

    Purchase returns (25,000 ) (40,000)

    Markup 100,00

    ___________________
    Cancellation of Mark up _ (30,000)

    GAS - Conservative 3,570,000 5,100,000

    Cost ratio (3,570,000 / 5,100,000 )= 0.70

    Markdown 350,000

    Cancellation Markdown ___________________ 10,000

    GAS - Average 3,570,000 4,760,000

    Cost ratio (3,570,000/ 4,760,000 ) = 0.75

    Less : Sales 4,000,000

    Sales returns (80,000) 3,920,000

    Ending Inventory at retail ________________ 840,000

    Conservative cost 840,000 x 0.70 B. 588,000

    Average cost 840,000 x 0.75 C. 630,000

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