Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year $2024$ operations is as follows:

January $1,2024,$ beginning inventory had a cost of $$100,000$ and a retail value of $$150,000.$

Purchases during $2024$ cost $$1,387,500$ with an original retail value of $$2,000,000.$

Freight costs were $$10,000$ for incoming merchandise.

Net additional markups were $$300,000$ and net markdowns were $$150,000.$

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

Merchandise is sold to employees at a $20\%$ of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of $2024$ is $$250,000.$

Sales to customers totaled $$1,750,000$ for the year.

$2.$ Estimate ending inventory and cost of goods sold using the LIFO retail method.

Note: Assume stable prices.