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Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2013 operations is as follows: January 1, 2013, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2013 cost $1,387,500 with an original retail value of $2,000,000. c. Freight costs were $10,000 for incoming merchandise. d. Net additional markups were $300,000 and net markdowns were $150,000. a. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value

Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2013 operations is as follows: January 1, 2013, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2013 cost $1,387,500 with an original retail value of $2,000,000. c. Freight costs were $10,000 for incoming merchandise. d. Net additional markups were $300,000 and net markdowns were $150,000. a. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2013 operations is as follows: January 1, 2013, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2013 cost $1,387,500 with an original retail value of $2,000,000. Freight costs were $10,000 for incoming merchandise. Net additional markups were $300,000 and net markdowns were $150,000. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value. a. C. d. e. f. g. 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 2013 is $250,000. Sales to customers totaled $1,750,000 for the year. Required: 1. Estimate ending inventory and cost of goods sold using the conventional retail method (average, LCM). (Round intermediate calculations to 2 decimals.) 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. (Assume stable prices.) (Round intermediate calculations to 2 decimals.)
Transcribed Image Text:Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2013 operations is as follows: January 1, 2013, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2013 cost $1,387,500 with an original retail value of $2,000,000. Freight costs were $10,000 for incoming merchandise. Net additional markups were $300,000 and net markdowns were $150,000. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value. a. C. d. e. f. g. 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 2013 is $250,000. Sales to customers totaled $1,750,000 for the year. Required: 1. Estimate ending inventory and cost of goods sold using the conventional retail method (average, LCM). (Round intermediate calculations to 2 decimals.) 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. (Assume stable prices.) (Round intermediate calculations to 2 decimals.)
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