Murdock Industries uses a periodic inventory system and the LIFO retail method t

Question

Murdock Industries uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following data has been summarized for December 31, 2016:

Estimate the LIFO cost of ending inventory. Assume stable retail prices during the period. (Do not round your "Cost-to-retail percentage" and round your final answer to the nearest whole number.)

Murdock Industries uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following data has been summarized for December 31, 2016:

Explanation / Answer

Cost Retail Net purchases $ 355,534 $   538,500 Net markups $      14,300 Net markdowns $      (8,500) Goods available for sale (Excluding beginning inventory) $ 355,534 $   544,300 Beginning inventory $ 113,000 $   162,000 Goods available for sale $ 468,534 $   706,300 Cost to retail percentage ($355,534/$544,300) = 65.32% Net sales $ (519,000) Ending inventory at retail $   187,300 Estimated ending inventory Cost Retail Beginning inventory $                                     113,000 $                                          162,000 Current periods layer $25,300*65.32% = $16,526 $187,300-$162,000 = $25,300 Total $                                     129,526 $                                          187,300

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