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AMPD 3033 Practice Test 4

The Retail Method of Inventory

1. Using the following figures from a menswear department, find the
closing book stock at retail.
Physical inventory January 15
\$105,000
Purchases retail January 16 through July 15
\$210,000
Gross sales
\$230,000
Returns from customers
\$40,000
\$8,000
Markdowns
\$18,000

2. The

a.
b.

following figures are from a small boutique, which has a 55% MU

Opening book inventory at retail
\$20,000
Net Sales
\$42,000
Markdowns
\$3,000
Purchases (retail)
\$55,000
Determine the retail book inventory for the period
Convert the closing retail book inventory figure to the cost value.

3. The ladies accessory department has a closing book inventory, at

retail, of \$600,000 and had achieved a 55.6% markup on total
merchandise handled. Determine the closing inventory at cost.

4. A sportswear department buyer was given the following data:

Cost

Opening inventory
\$630,000
Purchases
Net Sales
Markdowns

Calculate
a. The closing book inventory at retail
b. The closing book inventory at cost

Retail
\$425,000

\$1,120,000

\$2,285,000
\$1,550,000
\$105,000

5. Last year, the net sales in a mens denim department were \$455,000.
The book inventory at year-end was \$76,500, and the physical
inventory was \$75,000. What was the shortage percentage?

6. If the retail book inventory at the close of the year is \$1,250,000 and
the physical inventory totals only \$1,075,000, what will be the
shortage percentage, if net sales were \$12,000,000?

7. Find the shortage or overage percentage if:

Net sales
\$146,000
Opening inv (retail)
\$149,000
Markdowns
\$8,000
Employee Discounts
\$1,500
Retail purchases
\$102,000
Closing physical inventory
\$94,150

8. The merchandise plan for fall shows planned sales of \$55,000 with an
estimated shortage of 1.5%. What are the planned dollar shortages
for fall?

9. The net sales of a maternity department were \$325,000;inventory on

February 1 was \$175,000;markdowns were 10% of net sales;
purchases for this period were \$382,000;the physical inventory taken
on July 31 was \$198,600
a. Was there a dollar shortage for this period
b. What was the shortage or overage percentage for this period?

10.