For the life of me, I cannot understand this question! Will someoe please help me, explain to me how I can solve it, PLEASE!
Q- a party supplies store recorded net sles of $423,400 for he year.The store's beginnng iventory at retail was $105,850 andits ending inventory at retail was $127,020. What would be the inventory turnover at retail, rounded to the nearest tenth?
It would help if you proofread your questions before you posted them.
If no additional items have been ordered, how can the ending inventory exceed the beginning inventory?
To find the inventory turnover at retail, you need to calculate the cost of goods sold (COGS) and then divide it by the average retail inventory. Here's how you can solve it step-by-step:
1. Calculate the COGS: The formula for COGS is Opening Inventory + Net Purchases - Closing Inventory. Since the question only provides the retail value of the inventory, we need to convert both the beginning and ending inventory to the cost value. To do this, you can use the concept of the retail inventory method.
2. Calculate the Cost-to-Retail Ratio: The Cost-to-Retail Ratio is the percentage of cost value to retail value. You can calculate this ratio by dividing the cost value by the retail value. Using the given beginning and ending inventory at retail, you can determine the cost value for each and calculate the ratio.
3. Determine the COGS at cost: Multiply the net sales by the Cost-to-Retail Ratio calculated in step 2. This will give you the estimated cost of goods sold.
4. Calculate the Average Retail Inventory: The average retail inventory is the average of the beginning and ending inventory values at retail. Add the beginning and ending inventory at retail and divide by 2.
5. Calculate the Inventory Turnover at Retail: Divide the COGS at cost (from step 3) by the average retail inventory (from step 4). Round the answer to the nearest tenth.
By following these steps, you will be able to find the inventory turnover at retail for the party supplies store.