Harley Inc

Essay

Harley Inc. uses the conventional retail method to estimate its ending inventories. The following data has been summarized for December 31, 2009:
Required:
Estimate the cost of ending inventory applying the conventional retail method.
$$\begin{array} { l c r } & \text { Cost } & { \text { Retail } } \\\text { Inventory, January 1 } & \$ 208,000 & \$ 280,000 \\\text { Purchases } & 470,000 & 610,000 \\\text { Net markups } & & 15,300 \\\text { Net markdowns } & & 11,200 \\\text { Normal spoilage } & & 4,600 \\\text { Net sales } & & 489,500\end{array}$$