Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows: The inventory at January 1, 2016, had a retail value of $36,000 and a cost of $29,570 based on the conventional retail method. Transactions during 2016 were as follows: Cost Retail Gross purchases $ 165,860 $ 400,000 Purchase returns 5,600 29,000 Purchase discounts 4,100 Gross sales 323,000 Sales returns 10,000 Employee discounts 3,500 Freight-in 30,000 Net markups 16,000 Net markdowns 29,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2017, inventory was $87,450, the cost-to-retail percentage for 2017 under the LIFO retail method was 67%, and the appropriate price index was 106% of the January 1, 2017, price level. The retail value of the December 31, 2018, inventory was $41,965, the cost-to-retail percentage for 2018 under the LIFO retail method was 66%, and the appropriate price index was 109% of the January 1, 2017, price level. Required:1. Estimate ending inventory for 2016 using the conventional retail method.2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method. these are the right number I'm having a hard time figuring out DVL in retail cost 2017 ??? Inventory at 2016 – Conventional Retail Method = Retail @ 77,500 Cost @ 39,525 LIFO Retail Method = Retail @ 77,500 Cost @ 51,150 Inventory at 2017 using Dollar Value LIFO method =?? Inventory at 2018 using Dollar Value LIFO method = $25,410

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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Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows:

The inventory at January 1, 2016, had a retail value of $36,000 and a cost of $29,570 based on the conventional retail method.
Transactions during 2016 were as follows:

	Cost	Retail
Gross purchases	$	165,860	$	400,000
Purchase returns		5,600		29,000
Purchase discounts		4,100
Gross sales				323,000
Sales returns				10,000
Employee discounts				3,500
Freight-in		30,000
Net markups				16,000
Net markdowns				29,000

Sales to employees are recorded net of discounts.

The retail value of the December 31, 2017, inventory was $87,450, the cost-to-retail percentage for 2017 under the LIFO retail method was 67%, and the appropriate price index was 106% of the January 1, 2017, price level.
The retail value of the December 31, 2018, inventory was $41,965, the cost-to-retail percentage for 2018 under the LIFO retail method was 66%, and the appropriate price index was 109% of the January 1, 2017, price level.

Required:
1. Estimate ending inventory for 2016 using the conventional retail method.
2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.

Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.

these are the right number I'm having a hard time figuring out DVL in retail cost 2017 ???

Inventory at 2016 –

Conventional Retail Method = Retail @ 77,500 Cost @ 39,525

LIFO Retail Method = Retail @ 77,500 Cost @ 51,150

Inventory at 2017 using Dollar Value LIFO method =??

Inventory at 2018 using Dollar Value LIFO method = $25,410

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