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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
[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 $47,000 and a cost of $30,860 based on the conventional retail method.
- Transactions during 2019 were as follows:
Cost | Retail | |||||
Gross purchases | $ | 301,860 | $ | 510,000 | ||
Purchase returns | 6,100 | 12,000 | ||||
Purchase discounts | 5,200 | |||||
Gross sales | 476,000 | |||||
Sales returns | 8,000 | |||||
Employee discounts | 6,000 | |||||
Freight-in | 27,500 | |||||
Net markups | 27,000 | |||||
Net markdowns | 12,000 | |||||
Sales to employees are recorded net of discounts.
- The retail value of the December 31, 2020, inventory was $92,560, the cost-to-retail percentage for 2020 under the LIFO retail method was 65%, and the appropriate price index was 104% of the January 1, 2020, price level.
- The retail value of the December 31, 2021, inventory was $50,290, the cost-to-retail percentage for 2021 under the LIFO retail method was 64%, and the appropriate price index was 107% of the January 1, 2020, price level.
Required: 1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.) Cost Retail Cost-to-Retail Ratio Beginning inventory Goods available for sale Cost-to-retail percentage Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Required: 2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted should be indicated with a minus sign.) Cost Retail Cost-to-Retail Ratio Beginning inventory Goods available for sale (excluding beginning inventory) Goods available for sale (including beginning inventory) Cost-to-retail percentage Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Required: 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021. Total ending inventory at dollar-value LIFO retail cost, 2020 Total ending inventory at dollar-value LIFO retail cost, 2021
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