Dicer uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $260,000 ($396,000), purchases during the current year at cost (retail) were $1,370,000 ($2,200,000), freight-in on these purchases totaled $86,000, sales during the current year totaled $2,000,000, and net markups (markdowns) were $48,000 ($72,000). What is the ending inventory value at cost?
A) $371,228.
B) $378,092.
C) $386,804.
D) $572,000.

Question

Quizplus · Accepted Answer

The ending inventory at cost is $371,228. This is calculated by taking the beginning inventory at cost ($260,000), adding the purchases at cost ($1,370,000), adding the freight-in on purchases ($86,000), subtracting the sales ($2,000,000), and adding the net markups ($48,000).

Dicer Uses the Conventional Retail Method to Determine Its Ending