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.
$$\begin{array} { l c r } & \text { Cost } & { \text { Retail } } \\\text { Inventory, January 1 } & \$ 465,460 & \$ 736,000 \\\text { Purchases } & 1,412,000 & 2,344,000 \\\text { Net markups } & & ? ? ? \\\text { Net markdowns } & & 48,200 \\\text { Normal spoilage } & & 43,200 \\\text { Employee discounts } & & 75,600 \\\text { Net sales } & & 2,138,000 \\\text { Inventory, Dec. 31 } & 494,460 & 824,100\end{array}$$

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Definitions:

Biological Rhythms

Natural cycles of physical, mental, and behavioral changes that follow a periodic, predictable pattern, such as circadian rhythms or menstrual cycles.

Earth Orbiting

The path followed by an object, such as a satellite, as it revolves around the Earth under the influence of gravitational force.

Rotational Axis

An imaginary line around which an object, such as a planet, rotates, determining the direction and orientation of its rotation.

Free-Running Rhythm

Natural cycles of behavior or physiological processes that operate independently of external cues, often studied in the context of circadian rhythms.