Accounting Homework Week 3
bfwneysqt85
hw20ch20820b-08.10.xlsProblem
| The Quilting Pad is a retail store that sells materials for custom quilts. The store has a quilting room where quilters gather to sew and visit. | |
| The store's inventory consists of bolts of fabrics, spools of thread, and trays of various batting and backing material. Customers generally select what they need, and pay for what they use. The retail price of goods is clearly marked on the bolts, spools, and trays. The Quilting Pad has virtually no problem with theft or shortages of inventory. | |
| It is virtually impossible to track inventory in any detailed fashion. The store simply marks up all goods by a constant percentage. The mark up formula has been consistently applied to all items in inventory for many years. | |
| The Quilting Pad uses the retail inventory technique. Following is information for 20X7: | |
| Beginning inventory at cost | $ 46,800 |
| Beginning inventory at retail | 78,000 |
| Cost of purchases of inventory during the year | 230,000 |
| At the end of the year, the Quilting Pad's inventory was physically counted and it was determined that $100,000 was the retail value of goods on hand. | |
| Calculate the cost to retail percentage by analyzing the beginning inventory data. Apply the retail method to estimate the sales and gross profit for 20X7. |
&R&"Myriad Web Pro,Bold"&20B-08.10
B-08.10
Worksheet
| The cost to retail percentage is __________. | ||||
| The following analysis shows that sales of__________ were matched with cost of sales of _____________. This results in gross profit of _______________. | ||||
| At Cost (___% of retail) | At Retail | |||
| Beginning inventory | $ 46,800 | $ 78,000 | ||
| Purchases* | 230,000 | - | ||
| Goods available for sale | $ - | $ - | ||
| Sales | - | - | ||
| Ending inventory** | $ - | $ 100,000 | ||
| * | Purchases at retail = | |||
| ** | Ending inventory at cost = |
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-08.10
B-08.10
