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Q.5-9PSB-1

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Financial & Managerial Accounting
Found in: Page 271
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

The records of Macklin Co. provide the following information for the year ended December 31.

At cost

At Retail

January 1, Beginning Inventory

$90,022

$115,610

Cost of Goods Purchased

502,250

761,830

Sales

782,300

Sales Return

3,460

Required

1. Use the retail inventory method to estimate the company’s year-end inventory

Ending Inventory under the retail method is equal to $66,555.

See the step by step solution

Step by Step Solution

Definition of Sales Return

Sales return can be defined as the amount of goods purchased from any supplier being returned because of any defect or wrong receipt of an order.

Ending Inventory Using the Retail Inventory Method

Calculation of cost to retail ratio

Calculation of Ending Inventory:

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