Guinea, Inc. adopted the dollar-value LIFO retail inventory method on January 1, 2020, when theprice index was 100. The following information was taken from company records on December 31,2020, when the price index was 110.SalesAdditional markupsMarkup cancellationsMarkdownsMarkdown cancellationsInventory, January 1PurchasesPurchase returnsRequired:Compute the cost of the December 31, 2020, inventory.Cost$ 14,400168,0004,200Retail$190,00018,0006,0008,0002,00020,000194,0005,600

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Description: Guinea, Inc. adopted the dollar-value LIFO retail inventory method on January 1, 2020, when theprice index was 100. The following information was taken from company records on December 31,2020, when the price index was 110.SalesAdditional markupsMar

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Guinea, Inc. adopted the dollar-value LIFO retail price index was 100. The following information was taken from company records on December 31. 2020, when the price index was 110. Sales Cost Retail $190,000 18.000

Guinea, Inc. adopted the dollar-value LIFO retail price index was 100. The following information was taken from company records on December 31. 2020, when the price index was 110. Sales Cost Retail $190,000 18.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Guinea, Inc. adopted the dollar-value LIFO retail inventory method on January 1, 2020, when the
price index was 100. The following information was taken from company records on December 31,
2020, when the price index was 110.
Sales
Additional markups
Markup cancellations
Markdowns
Markdown cancellations
Inventory, January 1
Purchases
Purchase returns
Required:
Compute the cost of the December 31, 2020, inventory.
Cost
$ 14,400
168,000
4,200
Retail
$190,000
18,000
6,000
8,000
2,000
20,000
194,000
5,600

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