Blue Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $43,200 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2025 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $43,200 (b) 157,120 Retail $72,000 15,600 26,400 213,600 200,400 Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and final answers to O decimal places, e.g. 28,987.) (a) Ending inventory using conventional retail method $ Ending inventory LIFO retail method $

Blue Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $43,200 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2025 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $43,200 (b) 157,120 Retail $72,000 15,600 26,400 213,600 200,400 Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and final answers to O decimal places, e.g. 28,987.) (a) Ending inventory using conventional retail method $ Ending inventory LIFO retail method $

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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Current Attempt in Progress Cullumber Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $31,248 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Cost Retail Inventory, Jan. 1, 2025 $31,248 $50,400 Markdowns (net) 10,920 Markups (net) 18,480 Purchases (net) 109,960 149,520 Sales (net) 140,280 Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to…
Assume the perpetual inventory system is used unless stated otherwise.Accounting principles for inventory and applying the lower-of-cost-or-market rule Some of M and C Electronics’s merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $24,000 below the business’s cost of the goods, which was $97,000. Before any adjustments at the end of the period, the company’s Cost of Goods Sold account has a balance of $380,000. Requirements Journalize any required entries. At what amount should the company report merchandise inventory on the balance sheet? At what amount should the company report cost of goods sold on the income statement? Which accounting principle or concept is most relevant to this situation?
Keller Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,100 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2020 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $38,100 (b) Ending inventory LIFO retail method 130,900 Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and…
For all problems, assume the perpetual inventory: system is used unless stated otherwise. Accounting principles for inventory and applying the lower-of-cost-or-market rule Some of L and K Electronics ’s merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $32,000 below the business’s cost of the goods, which was $98,000. Before any adjustments at the end of the period, the company’s Cost of Goods Sold account has a balance of $410,000. Requirements Journalize any required entries. At what amount should the company report merchandise inventory on the balance sheet? At what amount should the company report the cost of goods sold on the income statement? Which accounting principle or concept is most relevant to this situation?
At the end of 2018, the Biggie Company performed its annual physical inventory count. John Lawrence, themanager in charge of the physical count, was told that an additional $22,000 in inventory that had been sold andwas in transit to the customer should be included in the ending inventory balance. John was of the opinion that themerchandise shipped should be excluded from the ending inventory since Biggie was not in physical possessionof the merchandise.Required:Discuss the situation and indicate why John’s opinion might be incorrect.
Current Attempt in Progress Nash Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company's merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $46,080 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Inventory, Jan. 1, 2025 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $46,080 167,600 Retail $76,800 16,640 28,160 227,840 213,760 Determine the cost of the 2025 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2…
On December 31, 2023, Jen & Mink Clothing (J&M) performed the inventory count and determined the year-end ending inventory value to be $76500. It is now January 8, 2024, and you have been asked to double-check the year-end inventory listing. J&M uses a perpetual inventory system. Note: Only relevant items are shown on the inventory listing. # 1 2 ... Jen & Mink Clothing, Inventory Listing December 31, 2023 Inventory Number Inventory Description Quantity (units) Unit Cost ($) Total Value ($) 7649 10824 Blue Jackets Black pants 102 304 22 17 2,244 5,168 *** Total Inventory $76,500 The following situations have been brought to your attention: a. On January 3, 2024, J&M received a shipment of 102 blue jackets, for $2,244 (Item #7649). The inventory was purchased December 23, 2023, FOB destination from Global Threads. This inventory was included in J&M's inventory count and inventory listing. b. On December 29, 2023, J&M sold scarves (Item # 5566) to a customer with a sale price of $720 and…
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