Problem
A retailer has a beginning monthly inventory valued at $100,000 at retail and $61,000 at cost. Net purchases during the month are $190,000 at retail and $115,000 at cost. Transportation charges are $10,500. Sales are $225,000. Markdowns and discounts equal $30,000. A physical inventory at the end of the month shows merchandise valued at $15,000 (at retail) on hand.
Compute the following:
a. Total merchandise available for sale-at cost and at retail.
b. Cost complement.
c. Ending retail book value of inventory.
d. Stock shortages.
e. Adjusted ending retail book value.
f. Gross profit.