Question

Bridgeport Inc. had beginning inventory of $12,320 at cost and $22,000 at retail. Net purchases were $110,544 at cost and $164,500 at retail. Net markups were $10,700, net markdowns were $7,200, and sales revenue was $148,800. Assume the price level increased from 100 at the beginning of the year to 120 at year-end. Compute ending inventory at cost using the dollar-value LIFO retail method

Answer 1

Answer

Total ending Inventory at dollar value LIFO retail cost

$22,058

• Working

	Cost	Retail	Cost to retail %
Beginning Inventory	$12,320	$22,000	56.000%
Net Purchases	$110,544	$164,500
Net Mark ups		$10,700
Net Mark downs		($7,200)
Purchases	$110,544	$168,000	65.800%
Goods available for sale	$122,864	$190,000
Net Sales		($148,800)
Ending Inventory at Retail		$41,200
Ending Inventory at Cost	($22,058)
Cost of Goods Sold	$100,806

	Step 1	Step 2	Step 3
Ending Inventory at Year end retail prices	Ending Inventory at Year end BASE YEAR retail prices	Inventory Layer at base year retail prices	Inventory Layers converted to cost
$41,200	$34,333	$22,000	$12,320	[22000 x 56% x 1.00]
	[ 41200 / 1.2 ]	$12,333	$9,738	[12333 x 65.8% x 1.2]
Total ending Inventory at dollar value LIFO retail cost			$22,058