Reference no: EM132542839

A gift store reported the following records for its operation during the month of February.

                                                @Cost                                 @Retail

Inventory on Feb. 1         $250,000                           $425,000

Net sales                            $430,000

Markdowns                           $85,000

Returns to vendors                $15,000                      $20,000

Employee discounts                  $10,000

Purchases                            $300,000                         $495,000

Question a. What was the book value of the closing inventory at retail in February

Question b. What was the cumulative markup% of total merchandise handled in February?

(Hint: Cumulative MU% is the MU% for Total Merchandise Handled (TMH), and

TMH = Opening inventory + Purchases - RTV)

Question c. What was the book inventory at cost on February 28 when the store closed?

Question d. The physical inventory at retail taken after closing the store on February 28 amounted to $378,000. Did this store experience a shortage or an overage or neither?

Question e. What was the shortage%/overage%?