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please help to solve this . Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2016 operations is
please help to solve this .
Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2016 operations is as follows: |
a. | January 1, 2016, beginning inventory had a cost of $400,000 and a retail value of $300,000. |
b. | Purchases during 2016 cost $1,955,000 with an original retail value of $3,800,000. |
c. | Freight costs were $25,000 for incoming merchandise. |
d. | Net additional markups were $150,000 and net markdowns were $650,000. |
e. | Based on prior experience, shrinkage due to shoplifting was estimated to be $30,000 of retail value. |
f. | Merchandise is sold to employees at a 25% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2016 is $360,000. |
g. | Sales to customers totaled $2,750,000 for the year. |
Required: | |
1. | Estimate ending inventory and cost of goods sold using the conventional retail method. |
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