Intact 1.

1
1-17. A.
Beginning Inventory 450,000
Add Net Purchases 3,150,000
Cost of Goods Sold Available for Sale 3,600,000
Less Estimated Cost of Goods Sold:
A. Gross Profit Rate is Based on Sales
4,200,000 X (100% - 40%) 2,520,000
Estimated Cost of Ending Inventory 1,080,000
(500,000)
580,000

B.
Beginning Inventory 450,000
Add Net Purchases 3,150,00
Cost of Goods Sold Available for Sale 3,600,000
Less Estimated Cost of Goods Sold:
B. Gross Profit Rate is Based on Cost
4,200,000 / (100% + 40% Rate) 3,000,000
Estimated Cost of Ending Inventory 600,000
500,000
100,000
Intact 1.1
1-18.
Beginning Inventory 133,500
Add Net Purchases 644,000
Cost of Goods Sold Available for Sale 777,500
Less Estimated Cost of Goods Sold:
Gross Profit Rate is Based on Cost
687,000 / (100% + 20%) 572,500
Estimated Cost of Ending Inventory 205,000
Intact 1.1
1-19.
Beginning Inventory 2,000,000
Add Net Purchases 980,000
Cost of Goods Sold Available for Sale 1,020,000
Less Estimated Cost of Goods Sold:
Gross Profit Rate is Based on Sales
3,200,000 X (100% - 90%) 320,000
Estimated Cost of Ending Inventory 700,000
Intact 1.1
1-20.
Beginning Inventory 200,000
Add Net Purchases 4,920,000
Cost of Goods Sold Available for Sale 5,120,000
Less Estimated Cost of Goods Sold:
Gross Profit Rate is Based on Sales
7,200,000 X (100% - 40%) 4,320,000
Estimated Cost of Ending Inventory 800,000
(100,000)
700,000
Intact 1.1
1-21.
Beginning Inventory 1,000,000
Add Net Purchases 790,000
Cost of Goods Sold Available for Sale 1,790,000
Less Estimated Cost of Goods Sold:
Gross Profit Rate is Based on Sales
2,150,000 X (100% - 30%) 1,505,000
Estimated Cost of Ending Inventory 285,000
(160,000)
125,000

Beginning Inventory 1,000,000

Add Net Purchases (No Freight Out) 820,000
Cost of Goods Sold Available for Sale 1,820,000
Less Estimated Cost of Goods Sold:
Gross Profit Rate is Based on Sales
2,150,000 X (100% - 30%) 1,505,000
Estimated Cost of Ending Inventory 285,000
(160,000)
155,000
Intact 1.1
1-22.
Beginning Inventory 575,400
Add Net Purchases 2,158,340
Cost of Goods Sold Available for Sale 2,733,740
Less Estimated Cost of Goods Sold:
A. Gross Profit Rate is Based on Sales
3,008,400 X (100% - 30%) 2,105,880
Estimated Cost of Ending Inventory 627,860
(264,000)
363,860
Intact 1.1
1-23. FIFO Retail Cost Retail
Beginning Inventory 355,000.00 750,000.00
Purchases 2,400,000.00 4,000,000.00
Purchase Returns
Purchase Allowances
Purchase Discounts
Freight-in
Additional Markups (net of cancellations)
Markdowns (net of cancellations)
Abnormal Losses
Departmental Transfers-out
2,400,000.00 4,000,000.00
Goods Available for Sale 2,755,000.00 4,750,000.00

Cost-to-retail ratio = 2,400,000/4,000,000 = 60%

Deduct:
Sales 3,500,000.00
Sales Returns
Employee Discounts
Normal Losses
Total 3,500,000.00
Ending Inventory, at retail 1,250,000.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
1,250,000 x 60% 750,000.00

Average Cost Basis Cost Retail

Beginning Inventory 355,000.00 750,000.00
Purchases 2,400,000.00 4,000,000.00
Purchase Returns
Purchase Allowances
Purchase Discounts
Freight-in
Additional Markups (net of cancellations)
Markdowns (net of cancellations)
Abnormal Losses
Departmental Transfers-out
2,400,000.00 4,000,000.00
Goods Available for Sale 2,755,000.00 4,750,000.00

Cost-to-retail ratio:

Goods available for sale, at cost 2,755,000.00 = 58%

Goods available for sale, at retail 4,750,000.00

Deduct:
Sales 3,500,000.00
Sales Returns
Employee Discounts
Normal Losses
Total 3,500,000.00
Ending Inventory, at retail 1,250,000.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
1,250,000 x 58% 725,000.00
Intact 1.1
1-24.
Average Cost Basis Cost Retail
Beginning Inventory 145,000.00 160,000.00
Purchases 283,920.00 420,800.00
Purchase Returns
Purchase Allowances
Purchase Discounts
Freight-in
Additional Markups (net of cancellations) 16,000.00
Markdowns (net of cancellations) (31,200.00)
Abnormal Losses
Departmental Transfers-out
283,920.00 405,600.00
Goods Available for Sale 428,920.00 565,600.00

Cost-to-retail ratio:

Goods available for sale, at cost 428,920.00 = 75.83%

Goods available for sale, at retail 565,600.00

Deduct:
Sales 450,000.00
Sales Returns (15,200.00)
Employee Discounts
Normal Losses
Total 434,800.00
Ending Inventory, at retail 130,800.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
130,800 x 75.83% 99,185.64
or 99,186.00
Intact 1.1
1-25.
Average Cost Basis Cost Retail
Beginning Inventory 630,000.00 1,050,000.00
Purchases 420,000.00 735,000.00
Purchase Returns
Purchase Allowances
Purchase Discounts
Freight-in
Additional Markups (net of cancellations) 65,000.00
Markdowns (net of cancellations) (105,000.00)
Abnormal Losses
Departmental Transfers-out
420,000.00 695,000.00
Goods Available for Sale 1,050,000.00 1,745,000.00

Cost-to-retail ratio:

Goods available for sale, at cost 1,050,000.00 = 60.17%

Goods available for sale, at retail 1,745,000.00

Deduct:
Sales 1,050,000.00
Sales Returns
Employee Discounts
Normal Losses
Total 1,050,000.00
Ending Inventory, at retail 695,000.00
(665,000.00)
30,000.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
695,000 x 60.17% 418,181.50
or 418,182.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
665,000 x 60.17% 400,130.50
or 400,131.00
Intact 1.1
1-26. FIFO Retail Cost Retail FIFO Cost of Goods Sold Cost Percentage: Retail Retail
Beginning Inventory 185,700.00 202,000.00 Beginning Inventory 202,000.00 202,000.00
Purchases 339,380.00 458,000.00 Purchases 470,500.00 470,500.00
Purchase Returns Total Cost of Goods Sold Available for Sale 672,500.00 672,500.00
Purchase Allowances (11,000.00) Ending Inventory 214,234.00 219,257.00
Freight-in 7,300.00 Cost of Goods Sold 458,266.00 453,243.00
Departmental Transfers-in 2,000.00 3,000.00
Additional Markups (net of cancellations) 9,500.00
Markdowns (net of cancellations)
Abnormal Losses
Departmental Transfers-out
337,680.00 470,500.00
Goods Available for Sale 523,380.00 672,500.00

Cost-to-retail ratio = 337,680/470,500= 71.77%

Deduct:
Sales 374,000.00
Sales Returns
Employee Discounts
Normal Losses
Total 374,000.00
Ending Inventory, at retail 298,500.00
(305,500.00)
(7,000.00)

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
298,500 x 71.77% 214,233.45
or 214,234.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
305,500 x 71.77% 219,257.35
or 219,257.00

Average Cost Basis Cost Retail Average Cost of Goods Sold Cost Percentage: Retail Retail
Beginning Inventory 185,700.00 202,000.00 Beginning Inventory 202,000.00 202,000.00
Purchases 339,380.00 458,000.00 Purchases 470,500.00 470,500.00
Purchase Returns Total Cost of Goods Sold Available for Sale 672,500.00 672,500.00
Purchase Allowances (11,000.00) Ending Inventory 232,323.00 237,771.00
Freight-in 7,300.00 Cost of Goods Sold 440,177.00 434,729.00
Departmental Transfers-in 2,000.00 3,000.00
Additional Markups (net of cancellations) 9,500.00
Markdowns (net of cancellations)
Abnormal Losses
Departmental Transfers-out
337,680.00 470,500.00
Goods Available for Sale 523,380.00 672,500.00

Cost-to-retail ratio:

Goods available for sale, at cost 523,380.00 = 77.83%

Goods available for sale, at retail 672,500.00

Deduct:
Sales 374,000.00
Sales Returns
Employee Discounts
Normal Losses
Total 374,000.00
Ending Inventory, at retail 298,500.00
(305,500.00)
(7,000.00)

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
298,500 x 77.83% 232,322.55
or 232,323.00

Ending Inventory, at estimated cost:

Ending Inventory at retail x cost percentage
305,500 x 77.83% 237,770.65
or 237,771.00