Retail inventory method to estimate its monthly inventories

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Reference no: EM13929418

Dixon Books uses the retail inventory method to estimate its monthly ending inventories. The following information is available for two of its departments at October 31, 2015.

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At December 31, Dixon Books takes a physical inventory at retail. The actual retail values of the inventories in each department are Hardcovers $1,192,900, and Paperbacks $505,850.

1. Determine the cost-to-retail ratio. (Round answers to 1 decimal place, e.g. 25.5%.)

Hardcovers: ___%

Paperbacks: ___%

2. Determine the estimated cost of the ending inventory for each department atOctober 31, 2015, using the retail inventory method. (Round answers to 0 decimal place, e.g. 25,120.)

Hardcovers: ___$

Paperbacks: ___$

3.Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios for the year are 68% for Hardcovers and 77% for Paperbacks. (Round answers to 0 decimal places, e.g. 25,120.)

Hardcovers: ___$

Paperbacks: ___$

Reference no: EM13929418

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