p9-5

alquist company uses retail method to estimate its ending inventory, selected information about its year 2016 operations is as follows:

a. January 1, 2016 begining inventory had a cost of 100,00 a retail value of 2,000,000

b. Purchases during 2016 cost 1,387,500 with an origonal retail value of 2,000,000

c. freight costs were 10,000 for incoming merchandise

d. net additional markups were 300,000 and net markdowns were 150,000

e. based on prior experience shrinkage due to shoplifting was estimated to be 15,000 of retail value

f. merchandise is sold to employees at a 20% of selling price discount. employee sales are recorded in a seperate account at the net selling price. the balance in this account at the end of 2016 is 250,000

g. sales to customers totaled 1,750,000 for the year

required

1. estimate ending inventory and cost of goods sold using the comventional retail method.

2. estimate ending inventory and cost of goods sold using the LIFO retail method, (assume stable prices)