On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information: Cost Retail Beginning inventory $ 57,000 $ 76,000 Net purchases 224,840 310,000 Net markups 8,000 Net markdowns 10,000 Net sales 287,000 Retail price index, end of year 1.02 Estimate ending inventory using the dollar-value LIFO retail method. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)) Cost Retail Cost-to-retail Ratio Beginning inventory $57,000 $76,000 Plus: Net purchases 224,840 310,000 Net markups 8,000 Less: Net markdowns (10,000) Goods available for sale (excluding beginning inventory) 224,840 308,000 Goods available for sale (including beginning inventory) 281,840 384,000 Base layer cost-to-retail percentage 75.00%selected answer correct 2021 layer cost-to-retail percentage 73.00%selected answer correct Less: Net sales (287,000) Estimated ending inventory at current year retail prices $97,000 Estimated ending inventory at cost ? Estimated cost of goods sold ?
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information: Cost Retail Beginning inventory $ 57,000 $ 76,000 Net purchases 224,840 310,000 Net markups 8,000 Net markdowns 10,000 Net sales 287,000 Retail price index, end of year 1.02 Estimate ending inventory using the dollar-value LIFO retail method. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.)) Cost Retail Cost-to-retail Ratio Beginning inventory $57,000 $76,000 Plus: Net purchases 224,840 310,000 Net markups 8,000 Less: Net markdowns (10,000) Goods available for sale (excluding beginning inventory) 224,840 308,000 Goods available for sale (including beginning inventory) 281,840 384,000 Base layer cost-to-retail percentage 75.00%selected answer correct 2021 layer cost-to-retail percentage 73.00%selected answer correct Less: Net sales (287,000) Estimated ending inventory at current year retail prices $97,000 Estimated ending inventory at cost ? Estimated cost of goods sold ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2021, Sanderson Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information:
| Cost | Retail | |||||
| Beginning inventory | $ | 57,000 | $ | 76,000 | ||
| Net purchases | 224,840 | 310,000 | ||||
| Net markups | 8,000 | |||||
| Net markdowns | 10,000 | |||||
| Net sales | 287,000 | |||||
| Retail price index, end of year | 1.02 | |||||
Estimate ending inventory using the dollar-value LIFO retail method. (Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.))
| Cost | Retail | Cost-to-retail Ratio | |
| Beginning inventory | $57,000 | $76,000 | |
| Plus: Net purchases | 224,840 | 310,000 | |
| Net markups | 8,000 | ||
| Less: Net markdowns | (10,000) | ||
| Goods available for sale (excluding beginning inventory) | 224,840 | 308,000 | |
| Goods available for sale (including beginning inventory) | 281,840 | 384,000 | |
| Base layer cost-to-retail percentage | 75.00%selected answer correct | ||
| 2021 layer cost-to-retail percentage | 73.00%selected answer correct | ||
| Less: Net sales | (287,000) | ||
| Estimated ending inventory at current year retail prices | $97,000 | ||
| Estimated ending inventory at cost | ? | ||
| Estimated cost of goods sold | ? |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Transcribed Image Text:Below is a transcription of the inventory estimation using the dollar-value LIFO retail method:
**Initial Data**
- **Beginning Inventory:**
- Cost: $57,000
- Retail: $76,000
- **Net Purchases:**
- Cost: $224,840
- Retail: $310,000
- **Net Markups:**
- Retail: $8,000
- **Net Markdowns:**
- Retail: $10,000
- **Net Sales:**
- Retail: $287,000
- **Retail Price Index, End of Year:** 1.02
**Instructions:** Estimate ending inventory using the dollar-value LIFO retail method. *(Round ratio calculation to 2 decimal places, e.g., 0.1234 should be entered as 12.34%.)*
**Estimation Table**
- **Beginning Inventory:**
- Cost: $57,000
- Retail: $76,000
- **Plus: Net Purchases**
- Cost: $224,840
- Retail: $310,000
- Net Markups:
- Retail: $8,000
- **Less: Net Markdowns:**
- Retail: $(10,000)
- **Goods Available for Sale (Excluding Beginning Inventory):**
- Cost: $224,840
- Retail: $308,000
- **Goods Available for Sale (Including Beginning Inventory):**
- Cost: $281,840
- Retail: $384,000
- **Base Layer Cost-to-Retail Percentage:** *(To be calculated)*
- **2021 Layer Cost-to-Retail Percentage:** *(To be calculated)*
- **Less: Net Sales:**
- Retail: $(287,000)
- **Estimated Ending Inventory at Current Year Retail Prices:**
- Retail: $97,000
- **Estimated Ending Inventory at Cost:** *(To be calculated)*
- **Estimated Cost of Goods Sold:** *(To be calculated)*
**Note:** The estimated values for ending inventory at cost and the estimated cost of goods sold should be calculated with respect to the indicated cost-to-retail ratios.
Solution
by Bartleby ExpertRecommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education