This TBS will ask you to complete various tasks involved with accounting for inventory. The TBS will provide you with all of the information necessary to do your work.

Lucci Inc. is a retailing firm specializing in high-end merchandise. Each of Lucci's stores uses the retail inventory method by applying the average-LCM alternative. The information below pertains to one department within its Scottsdale, Arizona store. You will use this information to determine ending inventory and cost of goods sold for financial reporting purposes. Assume no inventory shrinkage, and a periodic inventory system.

Beginning inventory of merchandise Cost, $40,000 Retail, $360,000

Purchases during the period Cost, $1,000,000 Retail, $10,000,000 Transportation in, $50,000 Transportation out, $32,000 Purchase returns Cost, $20,000 Retail, $196,000 Net additional markups, $800,000 Net markdowns, $500,000 Sales, $9,800,000

Using the information above, compute the amounts to be reported in the financial statements for ending inventory and cost of goods sold for the department. The spreadsheet below has been started for you. Line items have been entered in column A. In columns B and C, enter appropriate amounts as well as intermediate subtotals directly below the amounts leading to the subtotal. Include the cost to retail calculation as well as your two amounts for financial statement reporting. Round the cost to retail ratio to four decimal places and include the "0" preceding the decimal point. Enter 0 where no other entry is appropriate.

A1

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A

B

C

1

Line Item Description

Cost

Retail

2

Beginning inventory

$40,000

3

Purchases

4

Transportation in

5

Purchases returns

6

Net purchases

7

Net additional markups

8

Cost to retail ratio components

9

Net markdowns

10

Sales

11

Ending inventory, retail

12

Set up Calculation

13

Cost to retail ratio

14

Ending inventory, cost

15

Cost of goods sold