Question
In: Accounting
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 1, 2018 | 1.00 | |||||||||||
| December 31, 2018 | 1.08 | |||||||||||
| December 31, 2019 | 1.14 | |||||||||||
Required:
Estimate the 2018 and 2019 ending inventory and cost of goods sold
using the dollar-value LIFO retail inventory method. (Do
not round other intermediate calculations. Round your
cost-to-retail percentage calculations to 2 decimal places and
final answers to the nearest whole dollar.)
Solutions
Expert Solution
| 2018 | 2019 | ||
| Estimated ending inventory at retail | $90,720 | $110,880 | |
| Estimated ending inventory at cost | $68,676 | $85,887.6 | |
| Estimated cost of goods sold | $103,904 | $102,996.4 | |
| Year 2018 | |||
| Cost | Retail | ||
| Beginning inventory | $58,500 | $78,000 | |
| Add:Net purchases | $110,180 | $127,000 | |
| Add:Freight-in | $3,900 | ||
| Add:Net markups | $19,500 | ||
| less: Net markdowns | -$3,900 | ||
| Goods available for sale (excluding beginning inventory) | $114,080 | $142,600 | |
| Goods available for sale (including beginning inventory) | $172,580 | $220,600 | |
| Less: Net sales | -$128,980 | ||
| Less:Employee discounts (3600/(1-20%) - 3600 = | -$900 | ||
| Estimated ending inventory at retail | $90,720 | ||
| Estimated ending inventory at cost (calculated below) | $68,676 | ||
| Estimated cost of goods sold ($172,580 - 68,676) | $103,904 | ||
| The cost-to-retail ratio under LIFO for 2016 can be computed as follows: | |||
| Base layer cost to retail % = $58,500/$78000 | 75.00% | ||
| 2018 layer cost to retail % = Net purchases at cost + freightin/Net purchases plus markups less markdowns at retail | |||
| 2018 layer cost to retail % = $114080/$142,600 | 80.00% | ||
| Beginning inventory (Retail) | $78,000 | 75.00% | $58,500 |
| Increment in 2016 (90720-782000) | $12,720 | 80.00% | $10,176 |
| Ending inventory | $90,720 | $68,676 | |
| Year 2019 | |||
| Cost | Retail | ||
| Beginning inventory | $68,676 | $90,720 | |
| Add:Net purchases | $115,808 | $133,100 | |
| Add:Freight-in | $4,400 | ||
| Add:Net markups | $11,800 | ||
| less: Net markdowns | -$4,100 | ||
| Goods available for sale (excluding beginning inventory) | $120,208 | $140,800 | |
| Goods available for sale (including beginning inventory) | $188,884 | $231,520 | |
| Less: Net sales | -$119,140 | ||
| Less:Employee discounts (6000/(1-20%) - 6000= | -$1,500 | ||
| Estimated ending inventory at retail | $110,880 | ||
| Estimated ending inventory at cost (calculated below) | $85,887.6 | ||
| Estimated cost of goods sold | $102,996.4 | ||
| The cost-to-retail ratio under LIFO for 2016 can be computed as follows: | |||
| Base layer cost to retail % = $58,500/$78000 | 75.00% | ||
| 2019 layer cost to retail % = Net purchases at cost + freightin/Net purchases plus markups less markdowns at retail | |||
| 2018 layer cost to retail % = $103,800/$124,000 | 80.00% | ||
| 2019 layer cost to retail % = $120,208/$140800 | 85.38% | ||
| Beginning inventory (Retail) | $78,000 | 75.00% | $58,500 |
| Increment in 2018(above) | $12,720 | 80.00% | $10,176 |
| Increment in 2019 (diference) | $20,160 | 85.38% | $17,211.6 |
| Ending inventory | $110,880 | $85,887.6 |
ekkarill92 answered 1 year agoRelated Solutions
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
$
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, 2021, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2021, HGC Camera Store adopted the dollar-value
LIFO 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
$
31,200
$
48,000
Net purchases
82,720
112,000
$
90,275
$
118,800
Freight-in
2,400
2,900
Net markups
12,000
8,800
Net markdowns
2,400
2,600
Net sales to customers
109,815
104,960
Sales to employees (net of 20% discount)
2,900
4,640
Price Index:
January...
On January 1, 2016, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions...
On January 1, 2016, HGC Camera Store adopted the dollar-value
LIFO retail inventory method. Inventory transactions at both cost
and retail, and cost indexes for 2016 and 2017 are as follows: 2016
2017 Cost Retail Cost Retail Beginning inventory $ 51,800 $ 74,000
Net purchases 101,150 125,000 $ 107,532 $ 131,700 Freight-in 3,700
4,200 Net markups 18,500 11,400 Net markdowns 3,700 3,900 Net sales
to customers 125,250 118,800 Sales to employees (net of 20%
discount) 3,000 6,720 Price Index: January...
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.
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...
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, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records...
On January 1, 2021, Sanderson Variety Store adopted the
dollar-value LIFO retail inventory method. Accounting records
provided the following information:
Cost
Retail
Beginning inventory
$
43,800
$
73,000
Net purchases
169,940
295,000
Net markups
5,000
Net markdowns
7,000
Net sales
272,000
Retail price index, end of year
1.04
During 2022, purchases at cost and retail were $191,675 and
$348,500, respectively. Net markups, net markdowns, and net sales
for the year were $8,000, $9,000, and $305,000, respectively. The
retail price index...
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...
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
ADVERTISEMENT
Latest Questions
- Note: The answers to the following questions should be typed in the block of comments in...
- Python Describe the procedure for setting up the display of an image in a window.
- what are the fundamental similarity and differences between gap and dgap?
- Maria Gonzales is a 57-year-old operating room nurse who works full-time at a local hospital. She...
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
- What experience have you had with Organization Development or with Change Management? Describe the organization, the...
- 1. Renfro Rentals has issued bonds that have a 12% coupon rate, payable semiannually. The bonds...
ADVERTISEMENT