23) A retailer has a standard mark-up of 50% on invoiced cost. At the year end, 200 out of 5,000 products had been discounted by 20% of retail price.
Calculate the estimated costs as a percentage of retail price, separately for regular and discounted products.
24) A retailer has a standard mark-up of 25% on cost. For the month of June, the company recorded sales of $200,000 and purchases of $170,000. Inventory at the beginning of June was estimated to be $240,000.
Using the gross margin method, estimate the cost of goods sold for the month of June and the cost of inventory at the end of June.
25) Crossway Outfitters is a retailer of outdoor clothing and equipment. The company has a standard mark-up of 60% on invoiced cost. Inventory at the beginning of the year was $1,840,000. During the year, the company purchased $14,300,000 of goods and recorded sales of $24,000,000. The year-end inventory count showed $2,590,000 in inventory measured at actual retail prices. Included in this total of $2,590,000 is $390,000 of goods that had been discounted by 25% relative to regular prices.
Using the retail inventory method, estimate the cost of inventory at the year-end and the amount of cost of goods sold.
26) Explain the meaning of net realizable value and when raw materials, work in progress and finished goods inventories need to be written down.