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Company ABC uses the last-in, first-out (LIFO) dollar value retail inventory method. It adopted this method...

Company ABC uses the last-in, first-out (LIFO) dollar value retail inventory method. It adopted this method at the beginning of this year. The cost index for the year was 1.12. Below is information for the first year. Cost Retail BI 1082.0 1542.0 Net purchases 3462.4 5088.6 Net Sales 0.0 4579.7 Ending inventory at retail is: Answer The cost to retail conversion for beginning inventory is (round to at least 3 decimal points): Answer The cost to retail conversion for the layer added is (round to at least 3 decimal points): Answer Ending inventory at cost is: Answer Cost of goods sold is: Answer

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Ans. Particulars Cost Retail
Beginning inventory 1082 1542
Add: Net purchases 3462.4 5088.6
Goods available for sale (excluding beginning inventory) 3462.4 5088.6
Goods available for sale (including beginning inventory) 4544.4 6630.6
Less: net sales -4579.7
Estimated ending inventory at current year retail prices 2050.9
Estimated ending inventory at cost 1300
Estimated cost of goods sold   (4544.4 - 1300) 3244 rounded
Base year cost-to-retail percentage                  =                     1082 / 1542 * 100
70%
2018 cost-to-retail percentage                             =                    3462.4 / 5088.6 * 100
68%
*Calculation of estimated ending inventory at cost:
Ending inventory at retail price   =   2050.9
Ending inventory at base year retail price   =   Ending inventory at retail / price index
2050.9 / 1.12
1831.161
Inventory layers at base year retail prices: (converted to cost)
1542 * 1 * 70% 1079.4
(1831.161 - 1542) * 1.12 * 68% 220.2250176
Total ending inventory at cost 1300

ekkarill92 answered 1 year ago
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