information about its year 2016 operations is as follows: January 1, 2016, beginning inventory had a cost of $312,000 and a retail value of $330,000. Purchases during 2016 cost $1,740,000 with an original retail value of $2,670,000. Freight costs were $28,000 for incoming merchandise. .Net additional markups were $250,000 and net markdowns were $320,000. Based on prior experience, shrinkage due to shoplifting was estimated to be $33,000 of
information about its year 2016 operations is as follows: January 1, 2016, beginning inventory had a cost of $312,000 and a retail value of $330,000. Purchases during 2016 cost $1,740,000 with an original retail value of $2,670,000. Freight costs were $28,000 for incoming merchandise. .Net additional markups were $250,000 and net markdowns were $320,000. Based on prior experience, shrinkage due to shoplifting was estimated to be $33,000 of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Alquist Company uses the retail method to estimate its ending inventory. Selected
information about its year 2016 operations is as follows:
January 1, 2016, beginning inventory had a cost of $312,000 and a retail value of
$330,000.
b. Purchases during 2016 cost $1,740,000 with an original retail value of $2,670,000.
Freight costs were $28,000 for incoming merchandise.
Net additional markups were $250,000 and net markdowns were $320,000.
Based on prior experience, shrinkage due to shoplifting was estimated to be $33,000 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 2016 is $430,000.
Sales to customers totaled $2,000,000 for the year.
Estimate ending inventory at reatil and at cost using the LIFO retail method
Estimate Cost of goods sold using the LIFO retail method. (Assume stable prices.)
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