Question
In: Accounting
On January 1, 2021, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2021, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2021 and 2022 are as
follows:
| 2021 | 2022 | |||||||||||
| Cost | Retail | Cost | Retail | |||||||||
| Beginning inventory | $ | 31,200 | $ | 48,000 | ||||||||
| Net purchases | 82,720 | 112,000 | $ | 90,275 | $ | 118,800 | ||||||
| Freight-in | 2,400 | 2,900 | ||||||||||
| Net markups | 12,000 | 8,800 | ||||||||||
| Net markdowns | 2,400 | 2,600 | ||||||||||
| Net sales to customers | 109,815 | 104,960 | ||||||||||
| Sales to employees (net of 20% discount) | 2,900 | 4,640 | ||||||||||
| Price Index: | ||||||||||||
| January 1, 2021 | 1.00 | |||||||||||
| December 31, 2021 | 1.04 | |||||||||||
| December 31, 2022 | 1.10 | |||||||||||
Required:
Estimate the 2021 and 2022 ending inventory and cost of goods sold
using the dollar-value LIFO retail inventory method.
|
Solutions
Expert Solution
| 2021 | 2022 | |||||
| Cost | Retail | cost to retail ratio | Cost | Retail | cost to retail ratio | |
| Beginning inventory | 31200 | 48000 | .65 or 65% | 35568 | 56160 | |
| Purchase | 82720 | 112000 | 90275 | 118800 | ||
| Freight in | 2400 | 2900 | ||||
| Net mark Up | 12000 | 8800 | ||||
| Net markdown | -2400 | -2600 | ||||
| Total excluding beginning inventory | 82720+2400=85120 |
112000+12000-2400 121600 |
85120/121600=.70 or 70% | 90275+2900=93175 | 118800+8800-2600=125000 | 93175/125000=.7454 or 74.54% |
| Goods available for sale (Total excluding beginning inventory plus beginning inventory) | 116320 | 169600 | 128743 | 181160 | ||
| less:Net sales | (113440) | ( 110760) | ||||
| Ending inventory | 35568 | 56160 | 43767 | 70400 | ||
| Estimated cost of goods sold | 116320-35568= 80752 | 128743-43767=84976 |
#sales to employees (not net of discount) = Sales net /(1-discount)
sales 2021 :External sales +sales to employees (not net of discount)
109815+ [2900/(1-.20)]
109815+ 3625
113440
Sales 2022 : 104960+ [4640/(1-.20)]
104960+5800
110760
#Under LIFO units acquired last are sold first so ending inventory is left from initial inventory balance .
| 2021 | Ending Inventory at retail (at price Index) | Ending inventory (At base year) | Ending inventory at base year price left as (amounting to 54000) | Ending inventory at price index | Ending inventory at cost |
| 56160 | 56160 *1/1.04=54000 | Beginning :48000 | 48000*1=48000 | 48000*65%= 31200 | |
| Current year :54000-48000= 6000 | 6000*1.04= 6240 | 6240*70%= 4368 | |||
| Ending inventory at cost | 35568 |
| 2022 | Ending Inventory at retail (at price Index) | Ending inventory (At base year) | Ending inventory at base year price left as (amounting to 64000) | Ending inventory at price index | Ending inventory at cost |
| 70400 | 70400*1/1.10= 64000 | Beginning :48000 | 48000*1=48000 | 48000*65%= 31200 | |
| 2021: 6000 (last computed_ | 6000*1.04= 6240 | 6240*70%= 4368 | |||
| 2022 : 10000 | 10000*1.1= 11000 | 11000*74.54%=8199.4 | |||
| Ending inventory at cost | 43767.4 (rounded to 43767) |
ekkarill92 answered 2 years agoRelated Solutions
On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2018, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2018 and 2019 are as follows: 2018
2019 Cost Retail Cost Retail Beginning inventory $ 42,000 $ 60,000
Net purchases 94,500 118,000 $ 108,108 $ 133,200 Freight-in 3,000
3,500 Net markups 15,000 10,000 Net markdowns 3,000 3,200 Net sales
to customers 117,360 119,890 Sales to employees (net of 10%
discount) 3,600 6,300 Price Index: January...
On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2018, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2018 and 2019 are as
follows:
2018
2019
Cost
Retail
Cost
Retail
Beginning
inventory
$
58,500
$
78,000
Net purchases
110,180
127,000
$
115,808
$
133,100
Freight-in
3,900
4,400
Net markups
19,500
11,800
Net markdowns
3,900
4,100
Net sales to customers
125,380
119,140
Sales to employees (net of 20%
discount)
3,600
6,000
Price Index:
January...
On January 1, 2016, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2016, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2016 and 2017 are as follows: 2016
2017 Cost Retail Cost Retail Beginning inventory $ 51,800 $ 74,000
Net purchases 101,150 125,000 $ 107,532 $ 131,700 Freight-in 3,700
4,200 Net markups 18,500 11,400 Net markdowns 3,700 3,900 Net sales
to customers 125,250 118,800 Sales to employees (net of 20%
discount) 3,000 6,720 Price Index: January...
On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2018, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2018 and 2019 are as follows:
2018
2019
Cost
Retail
Cost
Retail
Beginning
inventory
$
42,000
$
60,000
Net purchases
94,500
118,000
$
108,108
$
133,200
Freight-in
3,000
3,500
Net markups
15,000
10,000
Net markdowns
3,000
3,200
Net sales to customers
117,360
119,890
Sales to employees (net of 10%
discount)
3,600
6,300
Price Index:
January...
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records...
On January 1, 2021, Sanderson Variety Store adopted the
dollar-value LIFO retail inventory method. Accounting records
provided the following information:
Cost
Retail
Beginning inventory
$
43,800
$
73,000
Net purchases
169,940
295,000
Net markups
5,000
Net markdowns
7,000
Net sales
272,000
Retail price index, end of year
1.04
During 2022, purchases at cost and retail were $191,675 and
$348,500, respectively. Net markups, net markdowns, and net sales
for the year were $8,000, $9,000, and $305,000, respectively. The
retail price index...
On January 1, 2021, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory...
On January 1, 2021, the Coldstone Corporation adopted the
dollar-value LIFO retail inventory method. Beginning inventory at
cost and at retail were $180,000 and $282,000, respectively. Net
purchases during the year at cost and at retail were $604,500 and
$920,000, respectively. Markups during the year were $10,000. There
were no markdowns. Net sales for 2021 were $900,000. The retail
price index at the end of 2021 was 1.04. What is the inventory
balance that Coldstone would report in its 12/31/2021...
On January 1, 2021, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for...
On January 1, 2021, Avondale Lumber adopted the dollar-value
LIFO inventory method. The inventory value for its one inventory
pool on this date was $275,000. An internally generated cost index
is used to convert ending inventory to base year. Year-end
inventories at year-end costs and cost indexes for its one
inventory pool were as follows:
Year Ended
Inventory
Cost Index
December 31
Year-End Costs
(Relative to Base Year)
2021
$
364,350
1.05
2022
374,960
1.09
2023
424,600
1.10
2024
454,260...
On January 1, 2021, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for...
On January 1, 2021, Avondale Lumber adopted the dollar-value
LIFO inventory method. The inventory value for its one inventory
pool on this date was $330,000. An internally generated cost index
is used to convert ending inventory to base year. Year-end
inventories at year-end costs and cost indexes for its one
inventory pool were as follows:
Year Ended
Inventory
Cost Index
December 31
Year-End Costs
(Relative to Base Year)
2021
$
418,080
1.04
2022
429,840
1.08
2023
482,870
1.09
2024
520,240...
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
Estimate ending inventory using the dollar-value LIFO retail method and the information provided.
Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2021. On that date, the...
Canova Corporation adopted the dollar-value LIFO retail method
on January 1, 2021. On that date, the cost of the inventory on hand
was $20,000 and its retail value was $25,000. Information for 2021
and 2022 is as follows:
Ending Inventory
at Retail
Retail Price
Index
Cost-to-Retail
Percentage
Date
12/31/2021
$
35,000
1.25
82
%
12/31/2022
$
42,000
1.40
85
%
Required:
1. What is the cost-to-retail percentage for the
inventory on hand at 1/1/2021?
2. Calculate the inventory value at...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
- A 19.34 g mixture of sugar (C12H22O11) and table salt (NaCl) is dissolved in 231 g...
- Young and Company claims that its pressurized diving bell will, on average, maintain its integrity to...
- 1) Alternative compiled code sequence using instructions in classes A, B, C. What is the average...
- An asset is purchased on January 1 for $48,700. It is expected to have a useful...
- Do we have any online or offline tool to convert c and cpp programs into MIPS...
ADVERTISEMENT