Raleigh department store uses the conventional retail method for the year ended
ID: 2558823 • Letter: R
Question
Raleigh department store uses the conventional retail method for the year ended december 31, 2016
Please help me out with REQUIRED 3 ONLY.
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows a. The inventory at January 1, 2016, had a retail value of $48,000 and a cost of $32,600 based on the conventional retail method b. Transactions during 2016 were as follows Cost Retail $312,360 $520,000 13,000 Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns 6,200 5,300 511,500 5,000 4,500 28,000 28,000 13,000 Sales to employees are recorded net of discounts c. The retail value of the December 31, 2017, inventory was $64,050, the cost-to-retail percentage for 2017 under the LIFO retail method was 68%, and the appropriate price index was 105% of the January 1, 2017, price level d. The retail value of the December 31, 2018, inventory was $51,300, the cost-to-retail percentage for 2018 under the LIFO retail method was 67%, and the appropriate price index was 108% of the January 1, 2017, price level Required 1. Estimate ending inventory for 2016 using the conventional retail method 2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018Explanation / Answer
Dollar Value LIFO Retail Method Year Ending Inventory at Year-End Retail Prices Ending Inventory at Base Year Retail Prices Inventory Layers at Base Year Retail Prices Inventory Layers Converted to Cost 2017 $64,050.00 $61,000.00 $59,000.00 $36,580.00 (a) 64050/105% $61000*(36580/61000) (61000-59000)=2000 ($2000*68%*105%)= $1428 (b) Total Ending Inventory at Dollar Value LIFO Retail Cost $38,008 (a+b) 2018 $51,300.00 $47,500.00 $47,500.00 $28,484.00 51300/108% 47500*(36580/61000) Total Ending Inventory at Dollar Value LIFO Retail Cost $28,484.00
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