Question
I need help just with question 2 and 3. I posted 2 separetally. Please help me with #3. Raleigh Department Store converted from the conventional
I need help just with question 2 and 3. I posted 2 separetally. Please help me with #3. |
Raleigh Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2014, and is now considering converting to the dollar-value LIFO retail inventory method. Management requested, during your examination of the financial statements for the year ended December 31, 2016, that you furnish a summary showing certain computations of inventory costs for the past three years. Available information follows: |
a. | The inventory at January 1, 2014, had a retail value of $36,000 and a cost of $29,570 based on the conventional retail method. |
b. | Transactions during 2014 were as follows: |
Cost | Retail | |||||
Gross purchases | $ | 165,860 | $ | 400,000 | ||
Purchase returns | 5,600 | 29,000 | ||||
Purchase discounts | 4,100 | |||||
Gross sales | 323,000 | |||||
Sales returns | 10,000 | |||||
Employee discounts | 3,500 | |||||
Freight-in | 30,000 | |||||
Net markups | 16,000 | |||||
Net markdowns | 29,000 | |||||
Sales to employees are recorded net of discounts. | |
c. | The retail value of the December 31, 2015, inventory was $87,450, the cost-to-retail percentage for 2015 under the LIFO retail method was 67%, and the appropriate price index was 106% of the January 1, 2015, price level. |
d. | The retail value of the December 31, 2016, inventory was $45,235, the cost-to-retail percentage for 2016 under the LIFO retail method was 66%, and the appropriate price index was 109% of the January 1, 2015, price level. |
Required: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | Prepare a schedule showing the computation of the cost of inventory at December 31, 2014, based on the conventional retail method. (Amounts to be deducted should be indicated by a minus sign.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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2. | Prepare a schedule showing the computation of the cost of inventory at December 31, 2014, based on the LIFO retail method. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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3. | Calculate the cost of inventory for December 31, 2015 and 2016, based on the dollar-value LIFO retail method. |
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I need help just with question 2 and 3. I posted 2 separetally. Please help me with #3. Calculate the cost of inventory for December 31, 2015 and 2016, based on the dollar-value LIFO retail method.
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