On January 1, 2011, HGC Camera Store adopted the dollar-value LIFO retail invent

Question

On January 1, 2011, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2011 and 2012 are as follows: 2011 2012 Cost Retail Cost Retail Beginning inventory $ 28,000 $ 40,000 Net purchases 85,000 108,000 90,000 114,000 Freight-in 2,000 2,500 Net markups 10,000 8,000 Net markdowns 2,000 2,200 Net sales to customers 100,000 104,000 Sales to employees (net of 20% discount) 2,400 4,000 Price Index: January 1, 2011 1.00 December 31, 2011 1.06 December 31, 2012 1.10 Required: Estimate the 2011 and 2012 ending inventory using the dollar-value LIFO retail inventory method. (Do not round your intermediate calculationsexcept cost-to-retail percentage to 2 decimal places (e.g. 12.34%) for calculation purposes. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) 2011 2012 Estimated ending inventory at cost $ $ Estimated ending inventory at retail $ $ Estimated cost of goods sold $ $

Explanation / Answer

Hi, Only Straight Line Method is mentioned in the question. So I am providing details for that only. Annual Depreciation for Each Year would be: = (48000-4000)/5 = 8800 Accumulated Depreciation Year 1 = 8800 Year 2 = 17600 Year 3 = 26400 Year 4 = 35200 Year 5 = 44000 Book Value Year 1 = 44000 - 8800 = 35200 Year 2 = 44000 - 17600 = 26400 Year 3 = 44000 - 26400 = 17600 Year 4 = 44000 - 35200 = 8800 Year 5 = 44000 - 44000 = 0 Thanks.

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