Financial Merchandise Management

A retailer has a beginning monthly inventory valued at $100,000 at retail and $61,000 at cost. Net purchases during the month are $190,000 at retail and $115,000 at cost. Transportation charges are $10,500. Sales are $225,000. Markdowns and discounts equal $30,000. A physical inventory at the end of the month shows merchandise valued at $15,000 (at retail) on hand. Compute the following:

a. Total merchandise available for sale – at cost and at retail.

b. Cost complement

c. Ending retail book value of inventory.

d. Stock shortages.

e. Adjusted ending retail book value.

f. Gross profit.