Question
In: Accounting
On January 1, 2018, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records...
On January 1, 2018, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information: Cost Retail Beginning inventory $ 60,750 $ 81,000 Net purchases 243,090 335,000 Net markups 7,000 Net markdowns 9,000 Net sales 312,000 Retail price index, end of year 1.04 Estimate ending inventory using the dollar-value LIFO retail method.
Solutions
Expert Solution
- Estimated ending inventory using dollar value LIFO retail method = $ 73,715
- Working for above answer
|
Cost |
Retail |
Cost to retail % |
|
|
Beginning Inventory |
$60,750 |
$81,000 |
75.000% |
|
Net Purchases |
$243,090 |
$335,000 |
|
|
Net Mark ups |
$7,000 |
||
|
Net Mark downs |
($9,000) |
||
|
Purchases |
$243,090 |
$333,000 |
73.000% |
|
Goods available for sale |
$303,840 |
$414,000 |
|
|
Net Sales |
($312,000) |
||
|
Ending Inventory at Retail |
$102,000 |
||
|
Ending Inventory at Cost |
($73,715) [STEP #3] |
||
|
Cost of Goods Sold |
$230,125 |
|
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 |
|
|
$102,000 |
$98,077 |
$81,000 |
$60,750 |
[81000 x 75.0% x 1.0] |
|
[ 102000 / 1.04 ] |
$17,077 |
$12,965 |
[17077 x 73.0% x 1.04] |
|
|
Total ending Inventory at dollar value LIFO retail cost |
$73,715 |
|||
ekkarill92 answered 1 year agoRelated Solutions
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3,900
4,400
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Net markdowns
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4,100
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2019
Cost
Retail
Cost
Retail
Beginning
inventory
$
42,000
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60,000
Net purchases
94,500
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$
108,108
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133,200
Freight-in
3,000
3,500
Net markups
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Net markdowns
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$911,000, respectively. Markups during the year were $9,000. There
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Net markups
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Net markdowns
2,400
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