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Calculate the estimated ending inventory at cost

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Reference no: EM132541668

The following information is available for Cosmic Corporation for the year ended December 31, 2018:

                                                                 Cost                             Retail

Beginning inventory                        $ 5,500                  $ 20,000

Purchases                                     82,500                   125,000

Purchases returns                           3,000                       4,200

Freight-in                                        5,000

Additional markups                                                       16,742

Additional markup cancellations                                      5,000

Markdowns                                                                3,542

Markdown cancellations                                               1,000

Sales                                                                     125,000

Sales returns                                                              5,000

Required:

Question (a) Calculate the estimated ending inventory at cost, using the retail method - average cost basis with LCNRV. (round your cost ratio to a maximum of 3 decimal places­)

Question (b) Calculate the estimated ending inventory at cost, using the retail method - FIFO basis, without LCNRV. (round your cost ratio to a maximum of 3 decimal places­)

Question (c) Assuming that the gross margin has averaged 38% of net sales over the past 3 years, calculate the estimated ending inventory at cost, using the gross margin method.

Question (d) (Please not use the "retail values" for anything other than "Sales" and "Sales Returns" when applying the gross margin method!)

Reference no: EM132541668

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