Weber Corporation uses the retail inventory method to estimate its inventory balances. The following information is available on June 30: Cost Retail Cost Retail Inventory, January 1 $25,000 $ 60,000 Markdowns — $7,000 Purchases 75,000 180,000 Additional markups — 3,000 Sales — 205,000 Markdown cancellations — 2,000 Purchases returns 2,000 5,000 Markup cancellations — 1,000 Required: Question Content Area 1. Compute the inventory on June 30 using the conventional retail inventory method (lower of average cost or market). Round the cost-to-retail ratio to three decimal places. WEBER CORPORATION Computation of Estimated Inventory Using Conventional Retail Inventory Method June 30 Cost Retail $- Select - $- Select - - Select - - Select - - Select - $fill in the blank 3f7553002046fb4_9 $fill in the blank 3f7553002046fb4_10 - Select - - Select - Ending inventory at retail $fill in the blank 3f7553002046fb4_15 Ending inventory at cost $fill in the blank 3f7553002046fb4_16 Question Content Area 2. Independent of Requirement 1, assume that the June 30 inventory was $80,000 at retail and that the cost-to-retail ratio is 50%. If the price level of the inventory has risen by 5% during the period, compute the cost of the June 30 inventory under the dollar-value retail LIFO method, assuming that the company adopted the method at the beginning of the year. If required, round to the nearest dollar. $ fill in the blank 8df662fd101bf8e_1

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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Weber Corporation uses the retail inventory method to estimate its inventory balances. The following information is available on June 30: Cost Retail Cost Retail Inventory, January 1 $25,000 $ 60,000 Markdowns — $7,000 Purchases 75,000 180,000 Additional markups — 3,000 Sales — 205,000 Markdown cancellations — 2,000 Purchases returns 2,000 5,000 Markup cancellations — 1,000 Required: Question Content Area 1. Compute the inventory on June 30 using the conventional retail inventory method (lower of average cost or market). Round the cost-to-retail ratio to three decimal places. WEBER CORPORATION Computation of Estimated Inventory Using Conventional Retail Inventory Method June 30 Cost Retail $- Select - $- Select - - Select - - Select - - Select - $fill in the blank 3f7553002046fb4_9 $fill in the blank 3f7553002046fb4_10 - Select - - Select - Ending inventory at retail $fill in the blank 3f7553002046fb4_15 Ending inventory at cost $fill in the blank 3f7553002046fb4_16 Question Content Area 2. Independent of Requirement 1, assume that the June 30 inventory was $80,000 at retail and that the cost-to-retail ratio is 50%. If the price level of the inventory has risen by 5% during the period, compute the cost of the June 30 inventory under the dollar-value retail LIFO method, assuming that the company adopted the method at the beginning of the year. If required, round to the nearest dollar. $ fill in the blank 8df662fd101bf8e_1

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