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Sunland Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Cost Retail Cost Retail Inventory 1/1 $14,500 $26,100 $ ? $ ? Purchases (net) 290,000 403,100 284,200 400,200 Net markups 5,800 11,600 Net markdowns 2,900 5,800 Sales (net) 373,520 379,900 Loss from breakage 580 -0- Applicable price 116 124 index Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method. Cost Retail Ratio Inventory 1/1/20 $14,500 $26,100 Purchases (net) 290,000 403,100 Net markups 5,800 Goods available $304,500 435,000 70% Sales (net) (373,520) Net markdowns (2,900) Loss from breakage (580) Inventory 12/31/20 at retail $58,000 Inventory 12/31/20 at LCM ($58,000 x 70%) $40,600

Sunland Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Cost Retail Cost Retail Inventory 1/1 $14,500 $26,100 $ ? $ ? Purchases (net) 290,000 403,100 284,200 400,200 Net markups 5,800 11,600 Net markdowns 2,900 5,800 Sales (net) 373,520 379,900 Loss from breakage 580 -0- Applicable price 116 124 index Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method. Cost Retail Ratio Inventory 1/1/20 $14,500 $26,100 Purchases (net) 290,000 403,100 Net markups 5,800 Goods available $304,500 435,000 70% Sales (net) (373,520) Net markdowns (2,900) Loss from breakage (580) Inventory 12/31/20 at retail $58,000 Inventory 12/31/20 at LCM ($58,000 x 70%) $40,600

FINANCIAL ACCOUNTING
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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Sunland Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Cost Retail Cost Retail Inventory 1/1 $14,500 $26.100 $ ? $ ? ? Purchases (net) 290,000 403,100 284.200 400,200 Net markups 5,800 11,600 Net markdowns 2,900 5,800 Sales (net) 373,520 379,900 Loss from breakage 580 -0- Applicable price 116 124 index Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method. Cost Retail Ratio Inventory 1/1/20 $14,500 $26,100 Purchases (net) 290,000 403.100 Net markups 5,800 Goods available $304,500 435,000 70% Sales (net) (373,520) Net markdowns (2,900) Loss from breakage (580) Inventory 12/31/20 at retail $58,000 Inventory 12/31/20 at LCM ($58,000 x 70%) $40,600 (a) Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answer to O decimal places, eg. 5,275,.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts Save for Later Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:Sunland Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/21. Available information consists of the following: 2020 2021 Cost Retail Cost Retail Inventory 1/1 $14,500 $26.100 $ ? $ ? ? Purchases (net) 290,000 403,100 284.200 400,200 Net markups 5,800 11,600 Net markdowns 2,900 5,800 Sales (net) 373,520 379,900 Loss from breakage 580 -0- Applicable price 116 124 index Following is a schedule showing the computation of the cost of inventory on hand at 12/31/20 based on the conventional retail method. Cost Retail Ratio Inventory 1/1/20 $14,500 $26,100 Purchases (net) 290,000 403.100 Net markups 5,800 Goods available $304,500 435,000 70% Sales (net) (373,520) Net markdowns (2,900) Loss from breakage (580) Inventory 12/31/20 at retail $58,000 Inventory 12/31/20 at LCM ($58,000 x 70%) $40,600 (a) Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answer to O decimal places, eg. 5,275,.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts Save for Later Attempts: 0 of 3 used Submit Answer
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