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ACC - ABC began operations on January 1, 2011

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Question;ABC began operations on January 1, 2011. On January 1, 2011, they purchased inventory at a cost of $2,400,000. The selling price of this inventory was initially set at $5,000,000.During 2011, net markdowns totaled $2,000,000, and net markups totaled $1,000,000. The ending inventory on December 31, 2011 (at Retail) was $1,600,000.During 2012, inventory was purchased at a cost of $3,000,000. The initial selling price of this inventory was set at $8,000,000. Net markdowns in 2012 were $1,000,000, and net markups were $400,000. Ending Inventory on December 31, 2012 (at Retail) was $1,800,000.a. Assuming that ABC uses the conventional retail inventory method, calculate the amount of inventory they should report on their December 31, 2011 Balance Sheet?;b. Assuming that ABC uses the conventional retail inventory method, calculate the amount of cost of goods sold that they will report on their Income Statement for the year-ending December 31, 2012?

 

Paper#43918 | Written in 18-Jul-2015

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