USA: +1 (725) 712-1730 
Sign in
ezto luん ACCOUNTING Chapter 9 HW Question 15 (of 17) 15. value: 10.00 points LeMay Department Store uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to one of its largest departments for the month of March 2016: Cost Retail $ 74,000 221,000 414,000 Beginning inventory54,000 Purchases Freight-in Purchase returns Net markups Net markdowns Normal breakage Net sales Employee discounts 18,358 6,500 9,000 7,200 4,900 9,000 294,000 1,600 Sales are recorded net of employee discounts. Required 1. Compute estimated ending inventory and cost of goods soid for March applying the conventional retail method. Cost Retail Beginning inventory Plus: Purchases Freight-in Less: Purchase returns Plus: Net markups Less: Net markdowns
Expert Answer
Gross profit method is used to determine the amount of estimated inventory loss.
| Particulars | Amount ($) | Amount ($) |
| Inventory, November 1 | 105,000 | |
| Add: Inventory purchased | 141,000 | |
| Cost of goods available for sale | 246,000 | |
| Less: Cost of goods sold | ||
| Net Sales | 221,000 | |
| Less: Gross profit (40% of sales) | -88400 | |
| Cost of Goods sold | 132,600 | |
| Ending Inventory | 113,400 | |
| Less: value of Usable damage goods | -13,000 | |
| Estimated loss from fire | 100,400 |
