Question

View previous attempt 29 Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been accumulated from the accounting records: Cost $292, 560 658, 692 Merchandise inventory, January 1, 2018 Net purchases Net markups Net markdowns Net sales Pertinent retail price indexes: January 1, 2018 December 31, 2018 Retail $ 460,000 1,016,000 13,600 3,600 628,000 1.00 1.10 Required: Estimate the ending inventory for December 31, 2018. (Round "Cost-to-retail percentage" to two decimal place.) Estimated ending inventory (At Retail) Estimated ending inventory (At Cost)

Answer 1

• Requirements

Ending Inventory at Retail	$858,000
Ending Inventory at Cost	$518,544

• Workings

	Cost	Retail	Cost to retail %
Beginning Inventory	$292,560	$460,000	63.600%
Net Purchases	$658,692	$1,016,000
Net Mark ups	$0	$13,600
Net Mark downs		($3,600)
Purchases	$658,692	$1,026,000	64.200%
Goods available for sale	$951,252	$1,486,000
Net Sales		($628,000)
Ending Inventory at Retail		$858,000 [See Step #1]
Ending Inventory at Cost	($518,544) [See Step #3]

	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
$858,000	$780,000	$460,000	$292,560	[460000 x 63.60% x 1.00]
	[ 858000 / 1.1 ]	$320,000	$225,984	[320000 x 64.2% x 1.10]
Total ending Inventory at dollar value LIFO retail cost			$518,544