Problem 1:
On June 30, Calico Fabrics has the following data pertaining to the retail inventory method. Goods available for sale: at cost $48,764; at retail $66,800; net sales $42,000; and ending inventory at retail $24,800.
Compute the estimated cost of the ending inventory using the retail inventory method.
The estimated cost of the ending inventory $
Problem 2:
Mercer Inc. is a retailer operating in British Columbia. Mercer uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Mercer Inc. for the month of January 2014.
|
Date
|
|
Description
|
|
Quantity
|
|
Unit Cost or Selling Price
|
|
January
|
1
|
|
Beginning inventory
|
|
200
|
|
$15
|
|
January
|
5
|
|
Purchase
|
|
280
|
|
19
|
|
January
|
8
|
|
Sale
|
|
220
|
|
29
|
|
January
|
10
|
|
Sale return
|
|
20
|
|
29
|
|
January
|
15
|
|
Purchase
|
|
110
|
|
22
|
|
January
|
16
|
|
Purchase return
|
|
10
|
|
22
|
|
January
|
20
|
|
Sale
|
|
180
|
|
34
|
|
January
|
25
|
|
Purchase
|
|
40
|
|
25
|
Calculate the Moving-average cost per unit at January 1, 5, 8, 15, 20, & 25.
For each of the following cost flow assumptions, calculate cost of goods sold, ending inventory, and gross profit. (1) LIFO. (2) FIFO. (3) Moving-average cost.