Question
BE 911 Dollar-value LIFO retail On January 1, 2018, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
BE 911 Dollar-value LIFO retail
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 | $ 40,800 | $ 68,000 |
Net purchases | 155,440 | 270,000 |
Net markups | 6,000 | |
Net markdowns | 8,000 | |
Net sales | 250,000 | |
Retail price index, end of year
| 1.02
|
BE 9-11) Calculate ending inventory under dollar value lifo retail method :
Cost | Retail | ||
Beginning inventory | 40800 | 68000 | |
Add: Net purchase | 155440 | 270000 | |
Add; Net Markups | 6000 | ||
Less: Net Markdowns | (8000) | ||
Goods available for sale (excluding beginning inventory) | 155440 | 268000 | |
Goods available for sale(including beginning inventory) | 196240 | 336000 | |
Base year cost to retail purchase 40800/68000 | 0.60 | ||
Cost to retail purchase 155440/268000 | 0.58 | ||
Less : net sales | (250000) | ||
Estimated ending inventory at current year retail price | 86000 | ||
ending inventory at year end retail price | step 1 ending inventory at base year retail prices | step 2 inventory layer at base year retail prices | step 3 inventory layers converted to costs |
86000 | 86000/1.02=84314 | 68000 | 68000*1*.60=40800 |
=84314-68000=16314 | =16314*1.02*0.58=9651 | ||
Total ending invneotry at dollar value LIFO retail cost | 50451 |
BE 912 Dollar-value LIFO retail
This exercise is a continuation of BE 911. During 2019, purchases at cost and retail were $168,000 and $301,000, respectively. Net markups, net markdowns, and net sales for the year were $3,000, $4,000, and $280,000, respectively. The retail price index at the end of 2019 was 1.06. Estimating ending inventory in 2019 using the dollar-value LIFO retail method.
BE 913 Change in inventory costing methods
In 2018, Hopyard Lumber changed its inventory method from LIFO to FIFO. Inventory at the end of 2017 of $127,000 would have been $145,000 if FIFO had been used. Inventory at the end of 2018 is $162,000 using the new FIFO method but would have been $151,000 if the company had continued to use LIFO. Describe the steps Hopyard should take to report this change. What is the effect of the change on 2018 cost of goods sold?
BE 914 Change in inventory costing methods
In 2018, Wade Window and Glass changed its inventory method from FIFO to LIFO. Inventory at the end of 2017 is $150,000. Describe the steps Wade Window and Glass should take to report this change.
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