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Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: The inventory at January 1, 2019, had

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

  1. The inventory at January 1, 2019, had a retail value of $31,000 and a cost of $11,000 based on the conventional retail method.
  2. Transactions during 2019 were as follows:

Cost

Retail

Gross purchases

$

570,000

$

953,000

Purchase returns

6,000

4,000

Purchase discounts

5,000

Gross sales

958,000

Sales returns

5,000

Employee discounts

3,000

Freight-in

20,000

Net markups

20,000

Net markdowns

4,000

Sales to employees are recorded net of discounts.

  1. The retail value of the December 31, 2020, inventory was $48,150, the cost-to-retail percentage for 2020 under the LIFO retail method was 42%, and the appropriate price index was 107% of the January 1, 2020, price level.
  2. The retail value of the December 31, 2021, inventory was $43,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 41%, and the appropriate price index was 110% of the January 1, 2020, price level.

Required: 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

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