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Raleigh Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2009, and is now considering converting to the
Raleigh Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2009, 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, 2011, 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, 2009, had a retail value of $44,780 and a cost of $26,498 based on the conventional retail method. b. Transactions during 2009 were as follows: Cost Retail Gross purchases $ 282,340 $ 490,450 Purchase returns 6,100 9,900 Purchase discounts 4,800 Gross sales 492,450 Sales returns 5,000 Employee discounts 3,100 Freight-in 27,200 Net markups 25,700 Net markdowns 9,100 -------------------------------------------------------------------------------- Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2010, inventory was $55,975, the cost-to-retail percentage for 2010 under the LIFO retail method was 64%, and the appropriate price index was 102% of the January 1, 2010, price level. d. The retail value of the December 31, 2011, inventory was $45,700, the cost-to-retail percentage for 2011 under the LIFO retail method was 63%, and the appropriate price index was 105% of the January 1, 2010, price level. Required: (1) Calculate estimated ending inventory at cost and retail, based on the conventional retail method. (Round the cost-to-retail percentage to whole percent (e.g. 12%) for calculation purposes. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Estimated ending inventory at cost $ Estimated ending inventory at retail $ (2) Calculate estimated ending inventory at cost and retail, based on the LIFO retail method. (Round the cost-to-retail percentage to whole percent (e.g. 12%) for calculation purposes. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Estimated ending inventory at cost $ Estimated ending inventory at retail $ (3) Calculate 2010 and 2011 total ending inventory at dollar-value LIFO retail method. (Do not round the cost-to-retail percentage. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Total ending inventory at dollar-value LIFO retail cost, 2010 $ Total ending inventory at dollar-value LIFO retail cost, 2011 $
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