| Please help me at your earliest convenience to understand practice question and add your calculations too. CPA Practice Question Klein Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/18. Available information consists of the following: | | | 2017 | | 2018 | | | | Cost | | Retail | | Cost | | Retail | | Inventory 1/1 | | $12,500 | | $22,500 | | $ ? | | $ ? | | Purchases (net) | | 250,000 | | 347,500 | | 245,000 | | 345,000 | | Net markups | | - | | 5,000 | | - | | 10,000 | | Net markdowns | | - | | 2,500 | | - | | 5,000 | | Sales (net) | | - | | 322,000 | | - | | 327,500 | | 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 12/31/14 based on the conventional retail method. | | | Cost | | Retail | | Ratio | | | Inventory 1/1/17 | | $12,500 | | $22,500 | | | | | Purchases (net) | | 250,000 | | 347,500 | | | | | Net markups | | - | | 5,000 | | | | | Goods available | | $262,500 | | 375,000 | | 70% | | | Sales (net) | | | | (322,000) | | | | | Net markdowns | | | | (2,500) | | | | | Loss from breakage | | | | (500) | | | | | Inventory 12/31/17 at retail | | | | $50,000 | | | | | Inventory 12/31/17 at LCM ($50,000 70%) | | $35,000 | | | | | | | | | | | |
| | 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.) | Account Titles and Explanation | Debit | Credit | | | | | | | | | | | | |
| | Prepare a schedule showing the computation of the 12/31/18 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 1/1/18 inventory (retail value $49,000) under the LIFO retail method at a cost of $34,000. (Do not leave any answer field blank. Enter 0 for amounts.) | | | Cost | | Retail | | Ratio | | Inventory | | $ | | $ | | | | Purchases | | | | | | | | Net markups | | | | | | | | Net markdowns | | | | | | | | Total | | | | | | % | | Total goods available | | $ | | | | | | Sales | | | | | | | | Ending inventory at retailend of year dollars | | | | $ | | | | | | | | | | | | Ending inventory deflated | | $ | | $ | | | | Beginning | | | | | | | | Layer added | | | | $ | | | | Ending inventory at cost | | $ | | | | | | | | | | |
Please help me at your earliest convenience to understand practice question and add your calculations too. CPA Practice Question Klein Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/18. Available information consists of the 2017 2018 Retail Inventory 11 $12,500 $22,500 Purchases (net) 250,000 347,500 245,000 345,000 5,000 0,000 Net markdowns 2,500 5,000 Sales (net) 322,000 327,500 Loss from b kage S000 Applicable price index 100 110 Following is a schedule showing the computation of the cost of inventory on hand at 12/31/14 based on the conventional retail method Retail Ratio Cost Inventory 17 $12,500 $22,500 Purchases (net) 250,000 347,500 Net markups 5,00 Good 262,500 375,00 322,000 Net markdowns 2,500 Loss from breakaoe Inventory 12/31/17 at retail $50,000 Inventory 12/31/17 at LCM ($50,000 x 70%) 35,000 Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. account titles are automatically indented when the amount is Do not Account Titles nd Explanation Prepare ng the putation of the 12/3 ventory based LIFO retail method as adiusted for fluctuatina prices, Without preiudice to you ur answer to (a) above, assume hat you puted the 18 entory (retai $49,000 LIFO retai ethod at a cost of $34,000. (Do not leave any answer field blank. Enter 0 for amounts) Retail I Cost Ratio rchases Net markups Net Total Total goods available Sales Ending inventory at retail-end of year dollars Ending inventory deflated Layer added Ending inventory at cost
