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Cindy Lou Linens Uses the Conventional Retail Method to Estimate

question 92

Essay

Cindy Lou Linens uses the conventional retail method to estimate its ending inventories. The company records sales net of employee discounts. The following partial data has been summarized for the year ended December 31, 2009:
Required:
Compute the net markups for Cindy Lou Linens during 2009.
 Cost  Retail  Inventory, January 1 $465,460$736,000 Purchases 1,412,0002,344,000 Net markups ??? Net markdowns 48,200 Normal spoilage 43,200 Employee discounts 75,600 Net sales 2,138,000 Inventory, Dec. 31 494,460824,100\begin{array} { l c r } & \text { Cost } & { \text { Retail } } \\\text { Inventory, January 1 } & \$ 465,460 & \$ 736,000 \\\text { Purchases } & 1,412,000 & 2,344,000 \\\text { Net markups } & & ? ? ? \\\text { Net markdowns } & & 48,200 \\\text { Normal spoilage } & & 43,200 \\\text { Employee discounts } & & 75,600 \\\text { Net sales } & & 2,138,000 \\\text { Inventory, Dec. 31 } & 494,460 & 824,100\end{array}


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