final-exam-fall2017 Question 68 (of 70) 68. Charleston Company has elected to us

Question

final-exam-fall2017 Question 68 (of 70) 68. Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been accumulated from the accounting records Cost Retail Merchandise inventory, January 1,2016 306,240 $ 480,000 664,088 1,018,000 13.800 3,300 639,000 Net purchases Net markups Net markdowns Net sales Pertinent retail price indexes January 1, 2016 December 31 2016 1.00 1.10 Required: Estimate the ending inventory for December 31.2016 (Round "Cost to-retal percentage" to two Estimated ending inventory (At Retail) Estimated ending inventory (At Cost)y

Explanation / Answer

COST ($) RETAIL ($) Inventory Jan 1                     306,240                       480,000 Net Purchases                     664,088                   1,018,000 Net Markup                         13,800 Net Markdown                         (3,800) Subtotal                     664,088                   1,035,600 Cost to retail : ($6,64,088/$1,035,600 = 64.12%) Goods available for Sales                     970,328                   1,515,600 Net Sales                     (639,000) Ending inventory at current year retail                       876,600 Step 1 Step 2 Step 3 Ending Inventory Ending Inventory Inventory Layers Inventory Layers At Year - End at Base Year at Base Year Converted Retail Prices Retail Prices Retail Prices to Cost $8,76,600/1.10 = $7,96,909 $4,80,000*1.00*0.64 $3,07,200 $3,06,240*1.10*0.64 $2,15,593 Total ending inventory at dollar-value LIFO retail cost $5,22,793

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