Question
On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and
On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows:
| 2024 | 2025 | |||
|---|---|---|---|---|
| Cost | Retail | Cost | Retail | |
| Beginning inventory | $ 162,500 | $ 250,000 | ||
| Purchases | 800,000 | 1,084,000 | $ 680,000 | $ 1,063,000 |
| Purchase returns | 7,000 | 12,150 | 2,000 | 4,300 |
| Freight-in | 12,500 | 2,000 | ||
| Net markups | 6,900 | 11,800 | ||
| Net markdowns | 4,750 | 8,000 | ||
| Net sales to customers | 950,000 | 722,000 | ||
| Sales to employees (net of 25% discount) | 22,500 | 22,500 | ||
| Normal spoilage | 4,200 | 6,900 | ||
| Price Index: | ||||
| January 1, 2024 | 1.00 | |||
| December 31, 2024 | 1.25 | |||
| December 31, 2025 | 1.25 | |||
Required:
1. Estimate the 2024 and 2025 ending inventory and cost of goods sold using the dollar-value LIFO retail method. Note: Round your cost-to-retail percentage calculation to 2 decimal places (i.e., 0.1234 should be 12.34%) and final answers to the nearest whole dollar.
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
