. The inventory at January 1, 2019, had a retail value of $39,000 and a cost of $31,130 based on the conve method. Transactions during 2019 were as follows: Cost Retail Gross purchases $200,15e $43e,e00 Purchase returns 5,900 4,400 26, eee Purchase discounts 397, see 8,e0e Gross sales Sales returns Employee discounts Freight-in 2, see 28, see 19,e0e 26,e00 Net markups Net markdowns ales to employees are recorded net of discounts.
. The inventory at January 1, 2019, had a retail value of $39,000 and a cost of $31,130 based on the conve method. Transactions during 2019 were as follows: Cost Retail Gross purchases $200,15e $43e,e00 Purchase returns 5,900 4,400 26, eee Purchase discounts 397, see 8,e0e Gross sales Sales returns Employee discounts Freight-in 2, see 28, see 19,e0e 26,e00 Net markups Net markdowns ales to employees are recorded net of discounts.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please explain in detail
![Required Information
[The following Information applies to the questions displayed below.]
Ralelgh Department Store uses the conventional retall method for the year ended December 31, 2019. Avallable
Information follows:
a. The Inventory at January 1, 2019, had a retal value of $39,000 and a cost of $31,130 based on the conventlonal retall
method.
b. Transactions during 2019 were as follows:
Cost
Retail
Gross purchases
$200,150
5,900
$430, 000
Purchase returns
26,e00
Purchase discounts
4,400
Gross sales
397,500
Sales returns
8,000
Employee discounts
Freight-in
Net markups
Net markdowns
2,5ee
28,500
19,000
26,000
Sales to employees are recorded net of discounts.
C. The retail value of the December 31, 2020, Inventory was $49,290, the cost-to-retail percentage for 2020 under the
LIFO retail method was 78%, and the appropriate price Index was 106% of the January 1, 2020, price level.
d. The retail value of the December 31, 2021, Inventory was $46,870, the cost-to-retall percentage for 2021 under the LIFO
retall method was 77%, and the appropriate price index was 109% of the January 1, 2020, price level.
Requlred:
2. Estimate ending Inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted
should be Indlcated with a mlnus sign.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8850b5eb-7489-444a-8520-4246624fe48b%2F6bf38304-1ac8-4e80-9da0-c66d43ee3758%2F40tnr7h_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following Information applies to the questions displayed below.]
Ralelgh Department Store uses the conventional retall method for the year ended December 31, 2019. Avallable
Information follows:
a. The Inventory at January 1, 2019, had a retal value of $39,000 and a cost of $31,130 based on the conventlonal retall
method.
b. Transactions during 2019 were as follows:
Cost
Retail
Gross purchases
$200,150
5,900
$430, 000
Purchase returns
26,e00
Purchase discounts
4,400
Gross sales
397,500
Sales returns
8,000
Employee discounts
Freight-in
Net markups
Net markdowns
2,5ee
28,500
19,000
26,000
Sales to employees are recorded net of discounts.
C. The retail value of the December 31, 2020, Inventory was $49,290, the cost-to-retail percentage for 2020 under the
LIFO retail method was 78%, and the appropriate price Index was 106% of the January 1, 2020, price level.
d. The retail value of the December 31, 2021, Inventory was $46,870, the cost-to-retall percentage for 2021 under the LIFO
retall method was 77%, and the appropriate price index was 109% of the January 1, 2020, price level.
Requlred:
2. Estimate ending Inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted
should be Indlcated with a mlnus sign.)
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