Question
As of January 1, 2017, Coronado Inc. adopted the retail method of accounting for its merchandise inventory. To prepare the stores financial statements at June
As of January 1, 2017, Coronado Inc. adopted the retail method of accounting for its merchandise inventory.
To prepare the store’s financial statements at June 30, 2017, you obtain the following data.
Cost | Selling Price | |||||
Inventory, January 1 | $28,600 | $40,200 | ||||
Markdowns | 9,800 | |||||
Markups | 8,800 | |||||
Markdown cancellations | 6,400 | |||||
Markup cancellations | 2,900 | |||||
Purchases | 106,566 | 158,000 | ||||
Sales revenue | 151,600 | |||||
Purchase returns | 3,100 | 4,000 | ||||
Sales returns and allowances | 7,500 |
Part 1
Compute Coronado’s June 30, 2017, inventory under the conventional retail method of accounting for inventories. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)
Inventory under the conventional retail method | $ |
Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $59,400 at retail and the ratio of cost to retail to be 71.14%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Compute the June 30, 2017, inventory at the June 30 price level under the dollar-value LIFO retail method. (Round ratios for computational purposes to 2 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)
Ending inventory at dollar-value LIFO cost | $ |
Step by Step Solution
3.45 Rating (145 Votes )
There are 3 Steps involved in it
Step: 1
PART1 Cost Retail Inventory as on Jan 1 28600 40200 Purchases 106566 158000 Purchases ret...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started