Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: a. The inventory at January 1, 2019, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $323,040 6,300 5,400 28,500 Retail $530,000 14,000 509,500 10,000 5,000 otal ending inventory at dollar-value LIFO retail cost, 2020 otal ending inventory at dollar-value LIFO retail cost, 2021 29,000 14,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $85,330, the cost-to-retail percentage for 2020 under the LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $52,320, the cost-to-retail percentage for 2021 under the LIFO retail method was 68%, and the appropriate price index was 109% of the January 1, 2020, price level. equired: Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for D20 and 2021.
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: a. The inventory at January 1, 2019, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $323,040 6,300 5,400 28,500 Retail $530,000 14,000 509,500 10,000 5,000 otal ending inventory at dollar-value LIFO retail cost, 2020 otal ending inventory at dollar-value LIFO retail cost, 2021 29,000 14,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $85,330, the cost-to-retail percentage for 2020 under the LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $52,320, the cost-to-retail percentage for 2021 under the LIFO retail method was 68%, and the appropriate price index was 109% of the January 1, 2020, price level. equired: Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for D20 and 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available
information follows:
a. The inventory at January 1, 2019, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail
method.
b. Transactions during 2019 were as follows:
Gross purchases
Purchase returns
Purchase discounts
Gross sales
Sales returns
Employee discounts
Freight-in
Net markups
Net markdowns.
Cost
$323,040
6,300
5,400
28,500
Retail
$530,000
14,000
509,500
10,000
5,000
Total ending inventory at dollar-value LIFO retail cost, 2020
Total ending inventory at dollar-value LIFO retail cost, 2021
29,000
14,000
Sales to employees are recorded net of discounts.
c. The retail value of the December 31, 2020, inventory was $85,330, the cost-to-retail percentage for 2020 under the
LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2020, price level.
d. The retail value of the December 31, 2021, inventory was $52,320, the cost-to-retail percentage for 2021 under the
LIFO retail method was 68%, and the appropriate price index was 109% of the January 1, 2020, price level.
Required:
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for
2020 and 2021.
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