Question

In: Accounting

On January 1, 2018, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory...

On January 1, 2018, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $180,000 and $292,950, respectively. Net purchases during the year at cost and at retail were $736,000 and $911,000, respectively. Markups during the year were $9,000. There were no markdowns. Net sales for 2018 were $878,000. The retail price index at the end of 2018 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2018 balance sheet? (Do not round intermediate calculations.)

$267,960.

$201,882.

$334,950.

$255,200.

Solutions

Expert Solution

Formula sheet

A B C D E F G H I J K
2
3 2018 Cost Retail
4 Beginning Inventory 180000 292950
5 Ratio of cost to retail =E4/G4
6 Add Net Purchases 736000 911000
7 Add Freight-in 0
8 Add Net Markups 9000
9 Deduct Net Markdowns 0
10 Totals (Excluding beginning inventory) =SUM(E6:E9) =SUM(G6:G9) =SUM(G6:G9)
11 Ratio of cost to retail =E10/G10
12 Goods Available for sale =E10+E4 =G10+G4 =G10+G4
13
14 Deduct Sales 878000
15 Less Employee discount 0
16 Net Sales =F14+F15 =F14+F15
17 Ending Inventory at Retail (price index 1.05) =G12-G16 =G12-G16
18 Ending Inventory at Retail (price index of 1.0) =G17/1.05 =G17/1.05
19 Beginning inventory at base year price =G4 =G4
20 Inventory increase (retail) from beginning period =G18-G19 =G18-G19
21
22 Calculation of Ending inventory for 2018
23 Ending invetory at retail at base price Base Year Prices Price index Cost to Retail Ratio Ending Inventory LIFO Cost
24 =G18 2017 =G19 1 =E5 =F24*G24*H24 =F24*G24*H24
25 2018 =G20 1.05 =E11 =F25*G25*H25 =F25*G25*H25
26 =SUM(I24:I25) =SUM(I24:I25)
27 Ending inventory LIFO Cost =I26
28
29 Hence ending inventory at the end of 2018 is =E27
30 Thus second option is correct.
31

Formula sheet

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

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...
Kingbird Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time...
Kingbird Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2016. At that time the inventory had a cost of $57,000 and a retail price of $100,000. The following information is available. Year-End Inventory at Retail Current Year Cost—Retail % Year End Price Index 2016 $133,560 56% 106 2017 146,520 59% 111 2018 124,120 60% 116 2019 168,750 57% 125 The price index at January 1, 2016, is 100. Compute the ending inventory at December 31 of the...
Marin Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2019. At that time...
Marin Corporation adopted the dollar-value LIFO retail inventory method on January 1, 2019. At that time the inventory had a cost of $52,000 and a retail price of $100,000. The following information is available. Year-End Inventory at Retail Current Year Cost—Retail % Year End Price Index 2019 $119,780 60% 106 2020 147,400 63% 110 2021 124,260 64% 114 2022 148,750 61% 125 The price index at January 1, 2019, is 100. Compute the ending inventory at December 31 of the...
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, 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, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for...
On January 1, 2018, Avondale Lumber adopted the dollar-value LIFO inventory method. The inventory value for its one inventory pool on this date was $350,000. 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) 2018 $ 438,780 1.03 2019 451,540 1.07 2020 508,680 1.08 2021 548,895...
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.
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...
On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following...
On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2018: Cost Retail Beginning inventory $ 72,420 $ 142,000 Net purchases 107,100 264,000 Net markups 6,000 Net markdowns 15,000 Net sales 229,000 Retail price index, 12/31/18 1.05 Required: Calculate the estimated ending inventory and cost of goods sold for 2018.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT