Kelcie Sports uses the dollar-value LIFO retail method. The price index on January 1, 2019, was 100, and on that date the inventory was $20,000 (retail) and $14,000 (cost). Additional information follows: 20192020Purchases, retail$160,000$204,000Purchases, cost115,200150,960Sales160,416202,160Price index, Dec. 31.102103What is the cost of the December 31, 2020, inventory (to the nearest dollar)? a. $14,610 b. $14,638 c. $14,660 d. $15,854

The retail method uses the cost to sales ratio for calculation the value of inventory. The value of inventory would be adjustable for price index.Cost of inventory on December 31, 2020 is as follows: Resultant table: Hence, option (c ) is correct.

Answered: Kelcie Sports uses the dollar-value…

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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Kelcie Sports uses the dollar-value LIFO retail method. The price index on January 1, 2019, was 100, and on that date the inventory was $20,000 (retail) and $14,000 (cost). Additional information follows:

	2019	2020
Purchases, retail	$160,000	$204,000
Purchases, cost	115,200	150,960
Sales	160,416	202,160
Price index, Dec. 31.	102	103

What is the cost of the December 31, 2020, inventory (to the nearest dollar)?

	a.	$14,610
	b.	$14,638
	c.	$14,660
	d.	$15,854

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