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 | ? |
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Transcribed Image Text:Beginning inventory
Net purchases
Net markups
Net markdowns
Net sales
Retail price index, end of year
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
$57,000 $ 76,000
224,840 310,000
8,000
10,000
287,000
1.02
Beginning inventory
Plus: Net purchases
Net markups
Less: Net markdowns
Goods available for sale (excluding beginning inventory)
Goods available for sale (including beginning inventory)
Base layer cost-to-retail percentage
2021 layer cost-to-retail percentage
Less: Net sales
Estimated ending inventory at current year retail prices
Estimated ending inventory at cost
Estimated cost of goods sold
$
Cost
57,000 $
224,840
224,840
281,840
Retail
76,000
310,000
8,000
(10,000)
308,000
384,000
(287,000)
97,000
Cost-to-retail
Ratio
Solution
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