(Retail Inventory Method) The records for the Clothing Department of Sharapova's Discount Store are summarized below for the month of January.
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Inventory, January 1,
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at retail:
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$25,000
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at cost:
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$17,000
|
|
Purchases in January,
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at retail:
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137,000
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at cost:
|
82,500
|
|
Freight-in,
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7,000
|
|
|
Purchases returns,
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at retail:
|
3,000
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at cost:
|
2,300
|
|
Transfers in from suburban branch,
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at retail:
|
13,000
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at cost:
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9,200
|
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Net markups:
|
8,000
|
|
|
Net markdowns:
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4,000
|
|
|
Inventory losses due to normal breakage, etc, at retail:
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at retail:
|
400
|
|
|
Sales
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at retail:
|
95,000
|
|
|
Sales returns:
|
2,400
|
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Instructions
(a) Compute the inventory for this department as of January 31, at Retail
(b) Compute the inventory using lower of average cost or market.