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Cheyenne Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2020. Amounts as shown below appear on the store's books before adjustment. Inventory, January 1, 2020 Purchases in 2020 Markups in 2020 Markdowns in 2020 Sales revenue in 2020. Cost $14,537 116,088 Retail $25,200 199,800 12,500 5,000 189,700 You are to assume that all markups and markdowns apply to 2020 purchases, and that it is appropriate to treat the entire inventory as a single department. Compute the inventory at December 31, 2020, under the following methods. A. The conventional retail method. Ending inventory using the conventional retail method B. The last-in, first-out retail method, effecting the change in method as of January 1, 2020. Assume that the cost-to-retail percentage for 2019 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 62%. Ending inventory using the last-in, first-out retail method

Cheyenne Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2020. Amounts as shown below appear on the store's books before adjustment. Inventory, January 1, 2020 Purchases in 2020 Markups in 2020 Markdowns in 2020 Sales revenue in 2020. Cost $14,537 116,088 Retail $25,200 199,800 12,500 5,000 189,700 You are to assume that all markups and markdowns apply to 2020 purchases, and that it is appropriate to treat the entire inventory as a single department. Compute the inventory at December 31, 2020, under the following methods. A. The conventional retail method. Ending inventory using the conventional retail method B. The last-in, first-out retail method, effecting the change in method as of January 1, 2020. Assume that the cost-to-retail percentage for 2019 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 62%. Ending inventory using the last-in, first-out retail method

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cheyenne Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2020. Amounts as shown below appear on the store's books before adjustment. Inventory, January 1, 2020 Purchases in 2020 Markups in 2020 Markdowns in 2020 Sales revenue in 2020 Cost $14,537 116,088 Retail $25,200 199,800 12,500 5,000 189,700 You are to assume that all markups and markdowns apply to 2020 purchases, and that it is appropriate to treat the entire inventory as a single department. Compute the inventory at December 31, 2020, under the following methods. A. The conventional retail method. Ending inventory using the conventional retail method B. The last-in, first-out retail method, effecting the change in method as of January 1, 2020. Assume that the cost-to-retail percentage for 2019 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 62%. Ending inventory using the last-in, first-out retail method
Transcribed Image Text:Cheyenne Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2020. Amounts as shown below appear on the store's books before adjustment. Inventory, January 1, 2020 Purchases in 2020 Markups in 2020 Markdowns in 2020 Sales revenue in 2020 Cost $14,537 116,088 Retail $25,200 199,800 12,500 5,000 189,700 You are to assume that all markups and markdowns apply to 2020 purchases, and that it is appropriate to treat the entire inventory as a single department. Compute the inventory at December 31, 2020, under the following methods. A. The conventional retail method. Ending inventory using the conventional retail method B. The last-in, first-out retail method, effecting the change in method as of January 1, 2020. Assume that the cost-to-retail percentage for 2019 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 62%. Ending inventory using the last-in, first-out retail method
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