Only need requirment 3.thank you Raleigh Department Store uses the conventional
ID: 2577790 • Letter: O
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Only need requirment 3.thank you
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows 0.45 points a. The inventory at January 1, 2016, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail method b. Transactions during 2016 were as follows Retail $323,040 $530,000 14,000 Cost Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns 6,300 5,400 eBook 509,500 10,000 5,000 28,500 Print 29,000 14,000 References Sales to employees are recorded net of discounts c. The retail value of the December 31, 2017, inventory was $85,330, the cost-to-retail percentage for 2017 under the LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2017, price level d. The retail value of the December 31, 2018, inventory was $52,320, the cost-to-retail percentage for 2018 under the LIFO retail method was 68%, and the appropriate price index was 109% of the January 1, 2017, price level Required 1. Estimate ending inventory for 2016 using the conventional retail methood 2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retal 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
Date
Inventory at end of the year
Price Index
Inventory at base year price
Change from prior year
December 31, 2016
$51,340
100
$51,340
0
December 31, 2017
$85,330
106
$80,500
$29,160
December 31, 2018
$52,320
109
$48,000
-$32,500
Computation of Dollar value inventory
December 31, 2017
$51,340 at 1 $51,340
$29,160 at $1.06 $30,909.6
$82,249.6
December 31, 2018
$51,340 at 1 $51,340
$51,340 at $1.06 $54,420.4
$105,760.4
Please note: The price index of 2017 has been used because no layer has been formed during the year 2018. The ending inventory at base-year-prices ($48,000) is less than the beginning inventory at base-year-prices ($80,500), hence base price of 2016 $51,340 has been used for determining dollar value for 2018
Date
Inventory at end of the year
Price Index
Inventory at base year price
Change from prior year
December 31, 2016
$51,340
100
$51,340
0
December 31, 2017
$85,330
106
$80,500
$29,160
December 31, 2018
$52,320
109
$48,000
-$32,500
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