Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 9, Problem 9.21E
Dollar-value LIFO retail
• LO9–5
Lance-Hefner Specialty Shoppes decided to use the dollar-value LIFO retail method to value its inventory. Accounting records provide the following information:
| Cost | Retail | |
| Merchandise inventory, January 1, 2018 | $160,000 | $250,000 |
| Net purchases | 350,200 | 510,000 |
| Net markups | 7,000 | |
| Net markdowns | 2,000 | |
| Net sales | 380,000 |
Related retail price indexes are as follows:
| January 1, 2018 | 1.00 |
| December 31, 2018 | 1.10 |
Required:
Determine ending inventory and cost of goods sold.
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Chapter 9 Solutions
Intermediate Accounting
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- Exercise 9-19 (Algo) Dollar-value LIFO retail [LO9-5] On January 1, 2024, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2024: Beginning inventory. Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/2024 Cost $ 84,560 127,000 Ending inventory at retail Ending inventory at cost Cost of goods sold Retail $ 151,000 260,000 9,000 15,000 237,000 1.05 Required: Calculate the estimated ending inventory and cost of goods sold for 2024 using the information provided. Note: Do not round intermediate calculations.arrow_forward8 10 On January 1, 2024, Select Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information: points Beginning inventory Net purchases Net markups Cost $ 40,800 Retail $ 68,000 155,440 270,000 6,000 Net markdowns Net sales Retail price index, end of year. 8,000 250,000 1.02 Estimate ending inventory using the dollar-value LIFO retail method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.) × Answer is not complete. Cost-to- Cost Retail retail ratio Beginning inventory $ Plus: Net purchases 40,800 $ 155,440 68,000 270,000 Net markups 6,000 Less: Net markdowns (8,000) Goods available for sale (excluding beginning inventory) 155,440 268,000 Goods available for sale (including beginning inventory) 196,240 336,000 Base layer cost-to-retail percentage 60.00% 2024 layer cost-to-retail percentage 58.00% Less: Net sales (250,000) Estimated ending inventory at current year retail prices $…arrow_forwardPlease do not give solution in image format thankuarrow_forward
- Nonearrow_forwardExercise 9-19 (Algo) Dollar-value LIFO retail [LO9-5] On January 1, 2024, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2024: Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/2024 Required: Calculate the estimated ending inventory and cost of goods sold for 2024 using the information provided. Note: Do not round intermediate calculations. Answer is complete but not entirely correct. Ending inventory at retail Ending inventory at cost Cost of goods sold Cost $ 82,600 119,500 $ $ $ 162,000 86,386 122,113 Retail $ 140,000 247,000 4,000 12,000 217,000 1.08arrow_forwardProblem 9-13 (Algo) Retail inventory method; various applications [LO9-3, 9-4, 9-5] [The following information applies to the questions displayed below.] On January 1, 2024, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2024 and 2025 are as follows: Beginning inventory Purchases Purchase returns Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 20% discount) Normal spoilage Price Index: January 1, 2024 December 31, 2024 December 31, 2025 Problem 9-13 (Algo) Part 1 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold $ $ $ 2024 2024 Cost Retail $ 150,500 $ 215,000 640,000 852,000 2,700 6,800 5,650 474,400 $ 354,756 $ (579,600) $ 1.00 1.25 1.25 2025 Required: 1. Estimate the 2024 and 2025 ending inventory and cost of goods sold using the dollar-value LIFO retail method. Note: Round your cost-to-retail percentage calculation…arrow_forward
- go.3arrow_forwardNonearrow_forwardProblem 9 - 10 (Algo) Dollar - value LIFO retail method [LO9 - 5] Smith - Kline Company maintains inventory records at selling prices as well as at cost. For 2024, the records indicate the following data: ($ in 000s) Cost Retail Beginning inventory $ 112 $ 160 Purchases 812 1,067 Freight-in on purchases 37 Purchase returns 13 Net markups 5 Net markdowns 9 Net sales 923 Required: Assuming the price level increased from 1.00 at January 1 to 1.45 at December 31, 2024, use the dollar - value LIFO retail method to approximate cost of ending inventory and cost of goods sold. Note: Round your intermediate and final answers to the nearest whole dollar. Enter your answers in thousands.arrow_forward
- 8 points On January 1, 2024, Select Variety Store adopted the dollar-value LIFO retail inventory method. Accounting records provided the following information: Beginning inventory Net purchases Cost $ 41,000 162,240 Retail $82,000 Net markups Net markdowns Net sales Retail price index, end of year 340,000 8,000 10,000 317,000 1.04 During 2025 (the following year), purchases at cost and retail were $195,075 and $433,500, respectively. Net markups, net markdowns, and net sales for the year were $9,000, $10,000, and $350,000, respectively. The retail price Index at the end of 2025 was 1.06. Estimate ending inventory in 2025 using the dollar-value LIFO retall method. Note: Round ratio calculation to 2 decimal places and round other intermediate calculations and final answer to the nearest whole dollar. Answer is complete but not entirely correct. Ending inventory S 83,784arrow_forwardProblem 9-13 (Algo) Retail inventory method; various applications [LO9-3, 9-4, 9-5] Skip to question [The following information applies to the questions displayed below.] On January 1, 2021, Pet Friendly Stores adopted the retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: 2021 2022 Cost Retail Cost Retail Beginning inventory $ 162,500 $ 250,000 Purchases 800,000 1,084,000 $ 680,000 $ 1,063,000 Purchase returns 7,000 12,150 2,000 4,300 Freight-in 12,500 2,000 Net markups 6,900 11,800 Net markdowns 4,750 8,000 Net sales to customers 950,000 722,000 Sales to employees (net of 25% discount) 22,500 22,500 Normal spoilage 4,200 6,900 Price Index: January 1, 2021 1.00…arrow_forwardExercise 9-19 (Algo) Dollar-value LIFO retall [LO9-5) On January 1, 2024, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2024: Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/2024 Cost $ 73,500 106, 400 Ending inventory at retail Ending inventory at cost Cost of goods sold Retail $147,000 271,000 5,000 10,000 245,000 1.05 Required: Calculate the estimated ending inventory and cost of goods sold for 2024 using the information provided. Note: Do not round intermediate calculations.arrow_forward
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