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Required information Skip to question [The following information applies to the questions displayed below.] Raleigh Department Store uses the conventional retail method for the year
Required information
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[The following information applies to the questions displayed below.] 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 a retail value of $29,000 and a cost of $21,000 based on the conventional retail method.
Transactions during 2019 were as follows:
Cost | Retail | |||||
Gross purchases | $ | 342,000 | $ | 582,500 | ||
Purchase returns | 4,500 | 6,000 | ||||
Purchase discounts | 5,000 | |||||
Gross sales | 582,500 | |||||
Sales returns | 5,000 | |||||
Employee discounts | 3,000 | |||||
Freight-in | 20,000 | |||||
Net markups | 17,000 | |||||
Net markdowns | 6,000 | |||||
Sales to employees are recorded net of discounts.
The retail value of the December 31, 2020, inventory was $40,040, the cost-to-retail percentage for 2020 under the LIFO retail method was 71%, and the appropriate price index was 104% of the January 1, 2020, price level.
The retail value of the December 31, 2021, inventory was $37,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 70%, and the appropriate price index was 107% 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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