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 $55,000 and a cost of $45,900 based on the conventional retail method.
b.	Transactions during 2014 were as follows:

	Cost			Retail
Gross purchases	$	390,900		$	590,000
Purchase returns		6,900			20,000
Purchase discounts		6,000
Gross sales					570,000
Sales returns					8,000
Employee discounts					4,000
Freight-in		31,500
Net markups					35,000
Net markdowns					20,000

	Sales to employees are recorded net of discounts.
c.	The retail value of the December 31, 2015, inventory was $83,740, the cost-to-retail percentage for 2015 under the LIFO retail method was 81%, 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 $55,590, the cost-to-retail percentage for 2016 under the LIFO retail method was 80%, 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.)

2.	Prepare a schedule showing the computation of the cost of inventory at December 31, 2014, based on the LIFO retail method.

Answer is complete but not entirely correct. Cost Retail Cost-to- Retail Ratio $ Beginning inventory Add: Purchases 55,000 590,000 Less: Purchase returns 45,900 390,900 (6,900) (6,000) 31,500 (20,000) Less: Purchase discounts Add: Freight-in Add: Net markups 35,000 660,000 71% X Cost-to-retail percentage Less: Net markdowns Goods available for sale Less: Net sales $ 455,400 (20,000) 640,000 (562,000) (4,000) 74,000 Less: Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost $ 0 0% S Answer is complete but not entirely correct. Cost Retail Cost-to- Retail Ratio $ $ 45,900 390,900 (6,900) (6,000) 55,000 590,000 (20,000) Beginning inventory Add: Purchases Less: Purchase returns Less: Purchase discounts Add: Net markups Less: Net markdowns Add: Freight-in Goods available for sale (excluding beginning inventory) Goods available for sale (including beginning inventory) 35,000 (20,000) 31,500 409,500 585,000 455,400 640,000 Cost-to-retail percentage 71% X Less: Net sales Less: Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost (562,000) (4,000) 74,000 $ OX 3. Calculate the cost of inventory for December 31, 2015 and 2016, based on the dollar- value LIFO retail method. Total ending inventory at dollar-value LIFO retail cost, 2015 Total ending inventory at dollar-value LIFO retail cost, 2016