9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

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Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…

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Textbook Question

Chapter 9, Problem 9.15E

Retail inventory method; LIFO

• LO9–3

Crosby Company owns a chain of hardware stores throughout the state. The company uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the three months ending March 31, 2018:

	Cost	Retail
Beginning inventory	$160,000	$280,000
Net purchases	607,760	840,000
Net markups		20,000
Net markdowns		4,000
Net sales		800,000

Required:

Estimate the LIFO cost of ending inventory and cost of goods sold for the three months ending March 31, 2018. Assume stable retail prices during the period.

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Chapter 9, Problem 9.14E

Chapter 9, Problem 9.16E

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Chapter 9 Solutions

Intermediate Accounting

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Solution Summary: The author explains how the retail inventory method determines the amount of ending inventory and cost of goods sold.

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