Suppose Holt Renfrew, the specialty retailer, had these records for ladies evening gowns during…

Suppose Holt Renfrew, the specialty retailer, had these records for ladies evening gowns during 2017. Beginning inventory (30 @ $1,000)…………………………………………………………….. $ 30,000 Purchase in February (25 @ $1,100)………………………………………………………………. 27,500 Purchase in June (60 @ $1,200)…………………………………………………………………….. 72,000 Purchase in December (25 @ $1,300)…………………………………………………………….. 32,500 Goods available……………………………………………………………………………………….. $162,000 Assume sales of evening gowns totaled 130 units during 2017 and that Holt uses the weighted-average-cost method under the periodic inventory system to account for inventory. The income tax rate is 30%. Requirements 1. Compute Holt s cost of goods sold for evening gowns in 2017. 2. Compute what cost of goods sold would have been if Holt had purchased enough inventory in December-at $1,300 per evening gown-to keep year-end inventory at the same level it was at the beginning of the year, 30 units?

 

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