Conti Retail Inventory Method Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during the year: Cost Retail Inventory, January $32,500 $65,000 Purchases 130,000 235,364 Markups (net) 5,000 Markdowns (net) 4,000 Sales 180,000 Required: 1. Compute the ending inventory by the retail inventory method for the following cost flow assumption: FIFO, Round the cost to retail ratio to three decimal places HARMES COMPANY Calculation of ending inventory by retall Inventory method PIPO Cost Retail Purchases 130,00 235,364 5.00 Add: Markups (net) Less: Markdowns (net) 4,000 130,000 236,164 Cost-to-retail ratio: 0.550 2. Compute the ending inventory by the retail inventory method for the following cost flow assumption: Average cost. Round the cost-to-retail ratio to three decimal places. HARMES COMPANY Calculation of ending inventory by retail inventory method Average Cost Cost Retail Beginning inventory 32.500 65,000 Purchases 130,000 235364 Add: Markups (net) 5.000 Less: Markdowns (net) 4,000 Goods available for sale 162.500 01.164 Cost-to-retail ratio 0.540 X Less: Sales 80 900 Ending inventory 3. Compute the ending inventory by the retail inventory method for the following cost flow assumption: LIFO. Round the cost-to-retail ratio to three decimal places HARMES COMPANY Calculation of ending inventory by retail inventory method LIFO Cost Retail Beginning Inventory Cost to retail ratio b100 00 ID ILU OD Cost-to-retail ratio 4. Compute the ending inventory by the retail inventory method for the following cost how assumption: Lower of cost or market (based on average cost). Round the cost-to-retail ratio to three decimal places. HARMES COMPANY Calculation of ending inventory by retail Inventory method Lower of Cost or Market (based on average cost) Cost Retail Cost-to-retail ratio 1000 ILOO