The Cherry Department Store uses the average cost retail inventory method to determine its ending...
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Accounting
The Cherry Department Store uses the average cost retail inventory method to determine its ending inventory. The accounting records for the current year for Cherry contained the following information:
|
| Cost | Retail |
| Purchases | $61,200 | $85,000 |
| Beginning inventory | 15,895 | 25,000 |
| Sales |
| 75,700 |
| Net markups |
| 7,500 |
| Net markdowns |
| 2,500 |
In addition, the accounting records for Cherry disclosed that purchases returns at cost and retail were $1,900 and $3,600, respectively. What is the cost-to-retail percentage to be used for ending inventory calculations?
| a. | 66.6% |
| b. | 67.5% |
| c. | 68.0% |
| d. | 69.0% |
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