Barker Pet supply uses the conventional retail method to determine its ending inventory at cost.Assume the beginning inventory at cost (retail) were $265,600 ($326,900), purchases during the current year at cost (retail) were $1,068,600 ($1,386,100), freight-in on these purchases totaled $63,900, sales during the current year totaled $1,302,000, and net markups (markdowns) were $2,000 ($96,300).What is the ending inventory value at cost?

Question

Quizplus · Accepted Answer

To calculate the ending inventory at cost using the conventional retail method, first calculate the cost-to-retail percentage: (Beginning Inventory Cost + Purchases Cost + Freight-in) / (Beginning Inventory Retail + Purchases Retail + Net Markups). Then, calculate the ending inventory at retail: (Beginning Inventory Retail + Purchases Retail + Net Markups - Net Markdowns - Sales). Finally, multiply the ending inventory at retail by the cost-to-retail percentage to get the ending inventory at cost.

Barker Pet Supply Uses the Conventional Retail Method to Determine