Question

On January 1, 2021, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2021:

	Cost		Retail
Beginning inventory	$	81,760	$	146,000
Net purchases		123,360		265,000
Net markups				4,000
Net markdowns				12,000
Net sales				238,000
Retail price index, 12/31/2021				1.10

Required:
Calculate the estimated ending inventory and cost of goods sold for 2021 using the information provided. (Do not round intermediate calculations.)

	Ending inventory at retail   _____ Ending inventory at cost _____ Cost of goods sold _____

Answer 1

Ending Inventory at Retail	$165,000
Ending Inventory at Cost	$83,872
Cost of Goods Sold	$121,248

--Working
	Cost	Retail	Cost to retail %
Beginning Inventory	81,760	1,46,000	56%
Net Purchases	1,23,360	2,65,000
Net Mark ups		4,000
Net Mark downs		-12,000
Purchases	1,23,360	2,57,000	48%
Goods available for sale	2,05,120	4,03,000
Net Sales		-2,38,000
Ending Inventory at Retail		1,65,000
Ending Inventory at Cost	83,872
Cost of Goods Sold	1,21,248

	Step 1	Step 2	Step 3
Ending Inventory at Year end retail prices	Ending Inventory at Year end BASE YEAR retail prices	Inventory Layer at base year retail prices	Inventory Layers converted to cost
1,65,000	1,50,000	1,46,000	81,760	[146000 x 56% x 1.00]
	[ 165000 / 1.10 ]	4,000	2,112	[4000 x 48% x 1.10]
Total ending Inventory at dollar value LIFO retail cost			83,872