Presented below is information related to Marin Company. Cost Retail Beginning inventory $103,820 $278,000 Purchases 1,402,000 2,152,000 Markups 93,600 Markup cancellations 13,900 Markdowns 34,600 Markdown cancellations 5,000 Sales revenue 2,206,000 Compute the inventory by the conventional retail inventory method.

The ending inventory for Marin comapny is $1664460

Explanation:

Solution

An Inventory is computed by using the conventional retail inventory method. which is statted belwo:

Inventory computed  for Marin Company

                                                            Cost              Retail

Beginning of Inventory                 $103,820           $278,000

Purchases                                      1,402,000          2,152,000

Total                                               1505820            243,000

Add: Net Markups

Markups                                                                    93,600

Markup cancellations                                             -13,900

                                                                                 79700

Total                                               1505820            2509700

Deduct: Net Markdown

Markdown                                                                 34,600

Markdown cancellation                                           -5,000

                                                                                  29,600

Sales price of goods                                                2480100

Sales revenue                                                           2,206,000

The retail ending is                                                   274,100

Thus,

The retail cost ratio is =  1505820 /2509700 = 60%

Hence, the cost of Ending inventory becomes =  274,100 * 60%

= $1664460.                                                  

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