Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2024 operations is as follows: a. January 1, 2024, beginning inventory had a cost of $270,000 and a retail value of $310,000. b. Purchases during 2024 cost $2,284,000 with an original retail value of $3,710,000. c. Freight costs were $26,000 for incoming merchandise. d. Net additional markups were $280,000 and net markdowns were $490,000. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $31,000 of retail value. f. Merchandise is sold to employees at a 20% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2024 is $410,000. g. Sales to customers totaled $2,900,000 for the year. Required: 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. Note: Assume stable prices. Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold LIFO Retail Method
Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2024 operations is as follows: a. January 1, 2024, beginning inventory had a cost of $270,000 and a retail value of $310,000. b. Purchases during 2024 cost $2,284,000 with an original retail value of $3,710,000. c. Freight costs were $26,000 for incoming merchandise. d. Net additional markups were $280,000 and net markdowns were $490,000. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $31,000 of retail value. f. Merchandise is sold to employees at a 20% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2024 is $410,000. g. Sales to customers totaled $2,900,000 for the year. Required: 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. Note: Assume stable prices. Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold LIFO Retail Method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2024
operations is as follows:
a. January 1, 2024, beginning inventory had a cost of $270,000 and a retail value of $310,000.
b. Purchases during 2024 cost $2,284,000 with an original retail value of $3,710,000.
c. Freight costs were $26,000 for incoming merchandise.
d. Net additional markups were $280,000 and net markdowns were $490,000.
e. Based on prior experience, shrinkage due to shoplifting was estimated to be $31,000 of retail value.
f. Merchandise is sold to employees at a 20% of selling price discount. Employee sales are recorded in a separate
account at the net selling price. The balance in this account at the end of 2024 is $410,000.
g. Sales to customers totaled $2,900,000 for the year.
Required:
2. Estimate ending inventory and cost of goods sold using the LIFO retail method.
Note: Assume stable prices.
Estimated ending inventory at retail
Estimated ending inventory at cost
Estimated cost of goods sold
LIFO Retail
Method
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