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In: Accounting
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
Estimate ending inventory using the dollar-value LIFO retail method and the information provided.
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| Sanderson Variety | ||||
| For 2021 | Cost | Retail | ||
| Beginning Inventory | $40,800 | $68,000 | ||
| Plus: Net Purchases | 155,440 | 270,000 | ||
| Net Markups | 6,000 | |||
| Less: Net Markdowns | (8,000) | |||
| Goods available for sale (excluding Beginning Inventory) | 155,440 | 268,000 | ||
| Goods available for sale (including Beginning Inventory) | 196,240 | 336,000 | ||
| Less: Net sales | 250,000 | |||
| Estimated Ending Inventory at current year Retail Prices | 86,000 | |||
| Estimated Ending Inventory at cost (calculated below) | 50,262 | |||
| Estimated Cost of goods sold | 145,978 | |||
| Ending Inventory at Year end Retail Prices | Ending Inventory at Base Year Retail Prices | Inventory layers at Base Year Retail Prices | Inventory layers converted to cost | |
| 86,000 | 86,000/1.02= 84,314 | 68,000 | 68,000*1*60%= | 40,800 |
| 16,314(84,314-68,000) | 16,314*1*58%= | 9,462 | ||
| Total ending inventory at dollar value retail method | 50,262 | |||
| Base layer cost to retail percentage | 40,800/68,000=60% | |||
| Current layer cost to retail percentage | 155,440/268,000=58% | |||
| Sanderson Variety | ||||
| For 2022 | Cost | Retail | ||
| Beginning Inventory | 50,262 | 86,000 | ||
| Plus: Net Purchases | 168,000 | 301,000 | ||
| Net Markups | 3,000 | |||
| Less: Net Markdowns | (4,000) | |||
| Goods available for sale (excluding Beginning Inventory) | 168,000 | 300,000 | ||
| Goods available for sale (including Beginning Inventory) | 218,262 | 386,000 | ||
| Less: Net sales | 280,000 | |||
| Estimated Ending Inventory at current year Retail Prices | 106,000 | |||
| Estimated Ending Inventory at cost (calculated below) | 58,098 | |||
| Estimated Cost of goods sold | 160,164 | |||
| Ending Inventory at Year end Retail Prices | Ending Inventory at Base Year Retail Prices | Inventory layers at Base Year Retail Prices | Inventory layers converted to cost | |
| 106,000 | 106,000/1,06=100,000 | 86,000 | 86,000*1*58.44%= | 50,258 |
| 14,000 | 14,000*1*56%= | 7,840 | ||
| Total ending inventory at dollar value retail method | 58,098 | |||
| Base layer cost to retail percentage | 50,262/86,000= 58.44% | |||
| Current layer cost to retail percentage | 168,000/300,000= 56% |
| Sanderson Variety | ||||
| For 2021 | Cost | Retail | ||
| Beginning Inventory | $40,800 | $68,000 | ||
| Plus: Net Purchases | 155,440 | 270,000 | ||
| Net Markups | 6,000 |
Junaid answered 2 years agoRelated Solutions
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
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$ 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
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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
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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
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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%
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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:
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and retail, and cost indexes for 2016 and 2017 are as follows: 2016
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Net purchases 101,150 125,000 $ 107,532 $ 131,700 Freight-in 3,700
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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:
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Year Ended
Inventory
Cost Index
December 31
Year-End Costs
(Relative to Base Year)
2021
$
364,350
1.05
2022
374,960
1.09
2023
424,600
1.10
2024
454,260...
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Cost Index
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Year-End Costs
(Relative to Base Year)
2021
$
418,080
1.04
2022
429,840
1.08
2023
482,870
1.09
2024
520,240...
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