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 $ 55,250 $ 85,000 Net purchases 222,390 355,000 Net markups 5,000 Net markdowns 7,000 Net sales 332,000 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%.))
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 $ 55,250 $ 85,000 Net purchases 222,390 355,000 Net markups 5,000 Net markdowns 7,000 Net sales 332,000 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%.))
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. 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 | $ | 55,250 | $ | 85,000 | ||
| Net purchases | 222,390 | 355,000 | ||||
| Net markups | 5,000 | |||||
| Net markdowns | 7,000 | |||||
| Net sales | 332,000 | |||||
| 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%.))
Transcribed Image Text: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-to-retail
Cost
Retail
Ratio
Beginning inventory
$
55,250 $
85,000
Plus: Net purchases
222,390
355,000
Net markups
5,000
Less: Net markdowns
(7,000)
Goods available for sale (excluding beginning inventory)
222,390
353,000
Goods available for sale (including beginning inventory)
277,640
438,000
Base layer cost-to-retail percentage
2021 layer cost-to-retail percentage
63.00%
Less: Net sales
(332,000)
Estimated ending inventory at current year retail prices
$
106,000
Estimated ending inventory at cost
Estimated cost of goods sold
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