7:56 Aa a A E9.20 (LO 5) (Retail Inventory Method) Presented below is information related to Bobby Engram Company. Retail Cost Beginning 58,000 $100,000 inventory Purchases 122,000 200,000 (net) Net 10,345 markups Net 26,135 markdowns Sales 186,000 revenue Instructions Compute the ending inventory at retail. a. b. Compute a cost-to-retail percentage (round to two decimals) under the following conditions 1. Excluding markdowns both markups and 2. Excluding markups but including markdowns. 3. Excluding markdowns but including markups 4. Including both markdowns and markups c. Which of the methods in (b) above (1, 2, 3. or 4) does the following? 9-35 C Contents Notebook Reader Bookmarks More 7:56 Aa a A Net markdowns 26,135 Sales 186,000 revenue Instructions a. Compute the ending inventory at retail b. Compute a cost-to-retail percentage (round to two decimals) under the following conditions. 1. Excluding markdowns both markups and 2. Excluding markups but including markdowns 3. Excluding markdowns but including markups Including both markdowns and markups. 4. c. Which of the methods in (b) above (1, 2, 3. or 4) does the following? 1. Provides the most conservative estimate of ending inventory. 2. Provides an approximation of lower-of- cost-or-market. 3. Is used in the conventional retail method. d. Compute ending inventory at lower-of-cost- or-market (round to nearest dollar) Compute cost of goods sold based on (d). e. f. Compute gross margin based on (d). 9-35 C Contents Notebook Reader Bookmarks More