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
College Accounting, Chapters 1-27
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Chapter13: Accounting For Merchandise Inventory
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Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...
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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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac69951b-8728-46ae-8bfb-4f439eaff53e%2F79882007-a6ed-41ef-9087-7a316d78519a%2F2501nz9_processed.jpeg&w=3840&q=75)
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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