Cullumber Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Retail Cost Cost Retail Inventory 1/1 $14,500 $20,500 ? Purchases (net) 269,000 347,500 247,500 346,500 Net markups 7,000 12,300 Net markdowns 3,700 5,100 Sales (net) 324,000 329,000 Loss from breakage 500 -0- Applicable price index 100 110 Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method Cost Retail Ratio Inventory 1/1/20 Purchases (net) $14,500 $20,500 347,500 269,000 Net markups 5,100 Goods available $283,500 375,000 76% Sales (net) (324,000) (3,700) Net markdowns Loss from breakage (500) Inventory 12/31/20 at retail $46,800 Inventory 12/31/20 at LCM ($46,800 x 76%) $35,568 Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answer to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Prepare a schedule showing the computation of the 12/31/21 inventory based on the LIFO retail method as adjusted for fluctuating prices. Without prejudice to your answer to (a) above, assume that you computed the 1/1/21 inventory (retail value $46,000) under the LIFO retail method at a cost of $37,000. (Round answers to 0 decimal places, e.g. 5,275.) Retail Cost Ratio Inventory Purchases Net markups Net markdowns Total Total goods available Sales Ending inventory at retail-end of year dollars Ending inventory deflated Beginning Layer added Ending inventory at cost Cullumber Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Retail Cost Cost Retail Inventory 1/1 $14,500 $20,500 ? Purchases (net) 269,000 347,500 247,500 346,500 Net markups 7,000 12,300 Net markdowns 3,700 5,100 Sales (net) 324,000 329,000 Loss from breakage 500 -0- Applicable price index 100 110 Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method Cost Retail Ratio Inventory 1/1/20 Purchases (net) $14,500 $20,500 347,500 269,000 Net markups 5,100 Goods available $283,500 375,000 76% Sales (net) (324,000) (3,700) Net markdowns Loss from breakage (500) Inventory 12/31/20 at retail $46,800 Inventory 12/31/20 at LCM ($46,800 x 76%) $35,568 Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answer to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Prepare a schedule showing the computation of the 12/31/21 inventory based on the LIFO retail method as adjusted for fluctuating prices. Without prejudice to your answer to (a) above, assume that you computed the 1/1/21 inventory (retail value $46,000) under the LIFO retail method at a cost of $37,000. (Round answers to 0 decimal places, e.g. 5,275.) Retail Cost Ratio Inventory Purchases Net markups Net markdowns Total Total goods available Sales Ending inventory at retail-end of year dollars Ending inventory deflated Beginning Layer added Ending inventory at cost
