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a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 6,500 5,600 29,500 Retail $550,000 16,000 544,000 5,000 6,000 31,000 16,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% 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.)

a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 6,500 5,600 29,500 Retail $550,000 16,000 544,000 5,000 6,000 31,000 16,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% 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.)

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 73BPSB: ( Appendix 6B) Inventory Costing Methods Grencia Company uses a periodic inventory system. For 2018...
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Raleigh Department Store uses the conventionalretail method for the year ended December 31, 2019. Available information follows .

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a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 Beginning inventory Add: Purchases Add: Freight-in Less: Purchase returns. Add: Net markups 6,500 5,600 Goods available for sale 29,500 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2020, price level. Retail $550,000 16,000 Required: 1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.) $ 544,000 5,000 6,000 $ 31,000 16,000 Cost 38,060 $ 344,940 29,500 (6,500) 406,000 Retail 51,000 550,000 (16,000) 585,000 585,000 Cost-to-Retail Ratio
Transcribed Image Text:a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 Beginning inventory Add: Purchases Add: Freight-in Less: Purchase returns. Add: Net markups 6,500 5,600 Goods available for sale 29,500 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2020, price level. Retail $550,000 16,000 Required: 1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.) $ 544,000 5,000 6,000 $ 31,000 16,000 Cost 38,060 $ 344,940 29,500 (6,500) 406,000 Retail 51,000 550,000 (16,000) 585,000 585,000 Cost-to-Retail Ratio
Cost-to-retail percentage Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Beginning inventory 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.) 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 585,000 $ Cost 0 $ Retail 0 0 Cost-to-Retail Ratio
Transcribed Image Text:Cost-to-retail percentage Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Beginning inventory 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.) 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 585,000 $ Cost 0 $ Retail 0 0 Cost-to-Retail Ratio
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