A company is in the process of preparing interim financial statements. Since they take physical on an annual basis they use the Retail Inventory Method to estimate the inventory. Fortunately, the Company keeps very detailed inventory records at both cost and retail. The following information for corrugated boxes as of the end of the third quarter, 2012, is provided.
Using the retail inventory method calculate ending inventory at cost (for the third quarter of 2012)
|
Cost
|
Retail
|
|
Beginning Inventory
|
92,000
|
167,000
|
|
Purchases
|
220,000
|
435,000
|
|
Purchase discounts
|
3,000
|
|
|
Purchase returns
|
8,000
|
|
|
Markups
|
|
10,000
|
|
Markup cancellations
|
|
25,000
|
|
Markdowns
|
|
5,000
|
|
Employee discounts
|
|
9,000
|
|
Sales
|
|
430,000
|