Question #1: A retailer has yearly sales of $650,000. Inventory on January 1 is $260,000 (at cost). During the year, $500,000 of merchandise (at cost) is purchased. The ending inventory is $265,000 (at cost). Operating costs are $90,000. a. Calculate the cost of goods sold b. Calculate the net profit Question # 2: A retailer has a beginning monthly inventory valued at $60,000 at retail and $35,000 at cost. Net purchases during the month are $40,000 at cost and $170,000 at retail. Transportation charges are $7,000. Sales are $150,000. Markdowns and discounts equal $20,000. A physical inventory at the end of the month shows merchandise valued at $10,000 (at retail) on hand. Compute the following: a. Total merchandise available for sale - at cost and at retail b. Cost complement c. Ending retail book value of inventory . d. Stock shortages e. Adjusted ending retail book value f. Gross profit Question # 3: A car dealer purchased multiple -disc CD players for $1195 each and desires a 40% markup (at retail). What retail price should be charged? MAR 4231 = Financial Formulas Note: When calculating the financials, please round to four decimal places. For example: 1.7658643983 = 1.7659 (four decimal places) 0.4322222222 = 0.4322 (four decimal places) Asset turnover Net sales Total assets Cost complement Total cost valuation Total retail valuation Cost of goods sold = Cost of merchandise available for sale - cost value of ending inventory Ending retail book value of inventory = on paper, how much is your inventory worth (at retail) = Merchandise available for sale - Sales - Deductions Financial Leverage Total assets Net worth Gross Profit= Sales - Cost of Goods Sold Net Profit - Gross Profit - Operating Expenses Net Profit Margin Net profit after taxes Net sales Profit & Loss Statement = Sales - less cost of goods sold = gross profit Return of Assets Net profit margin x asset turnover Return on Net worth = Net profit margin x Asset turnover x Financial leverage Stock Shortages = Ending retail book value of inventory - physical inventory at retail Total merchandise available (at cost) = Beginning monthly inventory + Net purchases + transportation charges Total merchandise available at retail) = Beginning monthly inventory + Net purchases