In: Accounting
On January 1, 2021, Pet Friendly Stores adopted the 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 | $ | 128,000 | $ | 200,000 | |||||||||
Purchases | 435,000 | 585,000 | $ | 670,000 | $ | 843,000 | |||||||
Purchase returns | 3,200 | 3,750 | 2,900 | 4,125 | |||||||||
Freight-in | 5,000 | 6,000 | |||||||||||
Net markups | 5,300 | 9,200 | |||||||||||
Net markdowns | 4,150 | 6,700 | |||||||||||
Net sales to customers | 400,000 | 696,000 | |||||||||||
Sales to employees (net of 20% discount) | 16,800 | 16,800 | |||||||||||
Normal spoilage | 2,700 | 5,600 | |||||||||||
Price Index: | |||||||||||||
January 1, 2021 | 1.00 | ||||||||||||
December 31, 2021 | 1.25 | ||||||||||||
December 31, 2022 | 1.25 | ||||||||||||
Problem 9-13 (Algo) Part 1
Required:
1. Estimate the 2021 and 2022 ending inventory and cost of
goods sold using the dollar-value LIFO retail method.
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