Question

The records of Lohse Stores included the following data: Inventory, May 1, at retail, $14,500; at cost, $10,440 Purchases during May, at retail, $42,900; at cost, $31,550 Freight-in, $2,000; purchase discounts, $250 Additional markups, $3,800; markup cancellations, $400; net markdowns, $1,300 Sales during May, $45,500 Calculate the estimated inventory at May 31 on a LIFO basis. Estimated inventory

Answer 1

Computation of the estimated inventory at May 31 on a LIFO basis
	Cost ($)
Inventory, May 1	10,440.00	14,500.00
Purchases	31,550.00	42,900.00
Freight - in	2,000.00	-
Purchase discounts	(250.00)	-
Add: Net markups (3,800-400)	-	3,400.00
Less: Net markdowns:	-	(1,300.00)
Totals excluding beginning inventory	33,300.00	45,000.00
Goods available	43,740.00	59,500.00
Less: sales		(45,500.00)
Ending inventory, at retail		14,000.00
Cost-to-retail ratio = 10,440,500/14 = 72%
Ending inventory at cost = 14,000 * 72% = $10,080