Question

Exercise 9-28 Cullumber Corporation began operations on January 1, 2020, with a beginning inventory of $39,852 at cost and $50,000 at retail. The following information relates to 2020. Retail Net purchases ($110,100 at cost) $151,100 Net markups 10,100 Net markdowns 5,000 Sales revenue 129,000

Assume Cullumber decided to adopt the conventional retail method. Compute the ending inventory to be reported in the balance sheet. (Round ratios for computational purposes to 1 decimal place, e.g. 78.7% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using the conventional retail method $ LINK TO TEXT

Assume instead that Cullumber decides to adopt the dollar-value LIFO retail method. The appropriate price indexes are 100 at January 1 and 110 at December 31. Compute the ending inventory to be reported in the balance sheet. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using the dollar-value LIFO retail method $ LINK TO TEXT

On the basis of the information in part (b), compute cost of goods sold. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to 0 decimal places, e.g. 28,987.) Cost of goods sold using the dollar-value LIFO retail method

Answer 1

a)

Computation of Retail inventory
	Cost	Retail
Beginning Inventory	$    39,852.00	$    50,000.00
Purchases	$ 110,100.00	$ 151,100.00
Markups		$    10,100.00
Markdown		$    (5,000.00)
Cost of good Available For Sale	$ 149,952.00	$ 206,200.00
Sales Revenue	$    93,783.00	$ 129,000.00
Inventory	$    56,169.00	$    77,200.00
Cost/Retail Ratio	72.7%
Inventory reported in Balance Sheet	$    56,169.00

b)

	Cost	Retail	Cost/retail Ratio
Beginning Inventory	$    39,852.00	$    50,000.00	79.70%
Purchases	$ 110,100.00	$ 151,100.00
Markups		$    10,100.00
Markdown		$    (5,000.00)
Total Net Purchases	$ 110,100.00	$ 156,200.00	70.49%
Sales Revenue	$    90,932.10	$ 129,000.00
Ending Inventory
Beginning Inventory	$    39,852.00	$    50,000.00
New Purchases	$    19,167.90	$    27,192.37
Cost of goods Sold	$    90,932.10