Question 1

Let It Snow Corp. (LSC) is a retailer of ski and snowboard equipment. Rowan has been asked to estimate the companys closing inventory at April 30, 2020, to validate the accuracy of the year-end inventory count. Pertinent details for fiscal 2020 follow:

	Cost	Retail
Gross sales		$1,685,000
Sales returns and allowances		38,000
Beginning inventory	$220,000	411,000
Purchases	975,000	1,834,000
Purchase returns	23,000	36,000
Freight-in	18,000
Freight-out	14,000
Additional markups		71,000
Markup cancellations		18,000
Markdowns		69,000
Markdown cancellations		8,000

• Historically, LSC has averaged a 64.50% gross margin.
• LSC rounds all percentages to two decimal places (for example, 31.47%).

Assume that LSC uses the retail method to estimate its closing inventory and follows IFRS. Based on this estimate, what value will LSC report for inventory on its statement of financial position as at April 30, 2020?

Question 1 options:

A	$269,891
B	$287,027
C	$291,459
D	$554,000