Question

Harvey's Junk Jewelry started business January 1, 2021, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2021:

	Cost				Retail
Beginning inventory	$	16,800			$	24,800
Purchases		50,800				79,800
Freight-in		4,300
Purchase returns		3,500				4,400
Net markups						2,900
Net markdowns						5,900
Net sales						72,400
Employee discounts						2,500

The estimated ending inventory at retail is:

Answer 1

Computation of the estimated inventory at retail on a LIFO basis
	Cost ($)
Beginning inventory	16,800.00	24,800.00
Purchases	50,800.00	79,800.00
Freight - in	4,300.00	-
Purchase returns	(3,500.00)	(4,400.00)
Add: Net markups	-	2,900.00
Less: Net markdowns:	-	(5,900.00)
Goods available for sale (excluding beginning inventory)	51,600.00	72,400.00
Goods available for sale (including beginning inventory)	68,400.00	97,200.00
Less: sales
Net sales	72,400.00
Add back employee discount	2,500.00	(74,900.00)
Ending inventory, at retail		22,300.00