Will Company began operations late in 2019 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2019 and no markdowns during 2019, the ending inventory for 2019 was $52,000 under both the conventional retail method and the LIFO retail method. At the end of 2020, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2020. The following data are available for computations: Cost Retail Inventory, January 1, 2020 $52,000 $70,000 Sales 240,000 Net markups 2,000 Net markdowns 8,600 Purchases 191,000 268,000 Freight-in 12,500 Estimated theft (abnormal) 2,000 Compute the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.
Will Company began operations late in 2019 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2019 and no markdowns during 2019, the ending inventory for 2019 was $52,000 under both the conventional retail method and the LIFO retail method. At the end of 2020, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2020. The following data are available for computations:
Cost Retail
Inventory, January 1, 2020 $52,000 $70,000
Sales 240,000
Net markups 2,000
Net markdowns 8,600
Purchases 191,000 268,000
Freight-in 12,500
Estimated theft (abnormal) 2,000
Compute the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
