Retail Inventory Method

Harmes Company is a clothing store that uses the retail inventory method. The following information relates to its operations during 2016:

	Cost	Retail
Inventory, January 1	$28,400	$40,200
Purchases	65,200	100,000
Markups (net)		1,900
Markdowns (net)		400
Sales		80,000

Required: t 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. If necessary, round dollar amounts to the nearest whole dollat HARMES COMPANY Calculabon of ending inventory by retail inventory method Purchases Marks (net Less Markdowms(net) L900 | Adl: Beginning inventory Goods available for salet Less: SalesY Ending ieventory at retall { 2a.400lv' 40.2001- { 141.7001 v 93-oV 80,000 61.700 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. If necessary, round dollar amounts to the nearest whole dollar HARMES COMPANY Calculation of ending inventory by recalil inventory method Beginning inventory Purchases dd: Markups (net) Less: Markdowns (net) Goods available for sale93,600 Less: Sales Ending inventory at retail Ending inventory at cost 28,400v 40.200 65.200100.000 1.900 400 400v 80,000 61.700 V 3. Compute the ending inventory by the retail inventory methed for the following cost flow assumption: LTFO. Round the cost-to-retail ratio to three decimal places. If necessary, round doilar amounts to the nearest whole dolar HARMES COMPANY lplatio ofinntory by etal invenfory method 28.400 40.200 Purchases dd Markups (net) Less Markdows (ned) 6200100090 100 141.760x Goods available for sale Les Sales Ending invenbory at etaa 93600 141.700 | 30.000 61.300 Begihning ayer s stsned in data) 4. Compute the ending Inventory by the retail inventory method for the following cost flow assumption: Lower of cost or market (based on average cost) Round the cost-to-retail ratio to thnee decinsall places. If necessary, round dellar amounts to the neanest whole dollar HARMES COMPANY Calcuilation of ending nercy by retail inventory method Lower of Cost or Market based on erage cost 2016 28,400) vs{ 40.2001 65,200100000 v Beginning imventory y Purchases 1.900 142.100 409 50,000 93.600 V Marklowns (net)y ess Sales Ending inventory at retail Ending inventory at LCH 61,700 V 39.121