Question
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 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 | $28,700 | $41,000 |
| Purchases | 68,500 | 101,100 |
| Markups (net) | 2,400 | |
| Markdowns (net) | 200 | |
| Sales | 79,000 | |
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. If necessary, round dollar amounts to the nearest whole dollar.
| HARMES COMPANY | ||
| Calculation of ending inventory by retail inventory method | ||
| FIFO 2016 | ||
| Cost | Retail | |
| Purchases | $ | $ |
| Add: Markups (net) | ||
| Less: Markdowns (net) | ||
| $ | $ | |
| Add: Beginning inventory | ||
| Goods available for sale | $ | $ |
| Less: Sales | ||
| Ending inventory at retail | $ | |
| Ending inventory at cost | $ | |
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 retail inventory method | ||
| Average Cost 2016 | ||
| Cost | Retail | |
| Beginning inventory | $ | $ |
| Purchases | ||
| Add: Markups (net) | ||
| Less: Markdowns (net) | ||
| Goods available for sale | $ | $ |
| Less: Sales | ||
| Ending inventory at retail | $ | |
| Ending inventory at cost | $ | |
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. If necessary, round dollar amounts to the nearest whole dollar.
| HARMES COMPANY | ||
| Calculation of ending inventory by retail inventory method | ||
| LIFO 2016 | ||
| Cost | Retail | |
| $ | $ | |
| $ | ||
| $ | $ | |
| $ | ||
| Ending inventory at LIFO cost | ||
| Beginning layer (as stated in data) | $28,700 | |
| New layer | ||
| Total | $ | |
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 three decimal places. If necessary, round dollar amounts to the nearest whole dollar.
| HARMES COMPANY | ||
| Calculation of ending inventory by retail inventory method | ||
| Lower of Cost or Market (based on average cost) 2016 | ||
| Cost | Retail | |
| $ | $ | |
| $ | $ | |
| $ | ||
| $ | ||
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Not For Profit Audit Committee Best Practices
Authors: Warren Ruppel
1st Edition
0471697419, 978-0471697411
