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P 9-8 Retail inventory method; conventional [ LO9-4 Grand Department Store, Inc., uses the...

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Accounting

image P 9-8 Retail inventory method; conventional [ LO9-4 Grand Department Store, Inc., uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October: Beginning inventory: At cost At retail Purchases (exclusive of freight and returns): At cost At retail Freight-in Purchase returns: At cost At retail Additional markups Markup cancellations Markdowns (net) Normal spoilage and breakage Sales Sales returns $20,000 30,000 100,151 146,495 5,100 2,100 2,800 2,500 265 800 4,500 140,000 4,270 Required: 1. Using the conventional retail ending inventory method, prepare a schedule computing estimated lower of cost or market (LCM) inventory and cost of goods sold for October. 2. A department store using the conventional retail inventory method estimates the cost of its ending inventory as $29,000. An accurate physical count reveals only $22,000 of inventory at lower of cost or market. List the factors that may have caused the difference between computed inventory and the physical count

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