Question
On January 1, 2016, ABC Company adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2016
On January 1, 2016, ABC Company adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2016 and 2017 are as follows:
| 2016 | 2017 | ||
| Cost | Retail | Cost | Retail |
Beginning inventory | $28,000 | $ 40,000 |
|
|
Net purchases | 85,000 | 108,000 | $90,000 | $114,000 |
Freight-in | 2,000 |
| 2,500 |
|
Net markups |
| 10,000 |
| 8,000 |
Net markdowns |
| 2,000 |
| 2,200 |
Net sales to customers |
| 100,000 |
| 104,000 |
Price Index: |
|
|
|
|
January 1, 2016 |
|
|
| 1.00 |
December 31, 2016 |
|
|
| 1.06 |
December 31, 2017 |
|
|
| 1.10 |
Required:
Estimate the 2016 and 2017 ending inventory and cost of goods sold using the dollar-value LIFO retail inventory method.
Please show all work.
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