Question

On January 1, 2021, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: Beginning inventory Net purchases Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 20% discount) Price Index: January 1, 2021 December 31, 2021 December 31, 2022 2021 2022 Cost Retail Cost Retail $28,000 $ 40,000 85,000 108,000 $90,000 $114,000 2,000 2,500 10,000 8,000 2,000 2,200 100,000 104,000 2,400 4,000 1.00 1.06 1.10 Required: Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail inventory method. (Do not round other intermediate calculations. Round your cost-to-retail percentage calculation to 2 decimal places and final answers to the nearest whole dollar.) 2021 2022 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold

Answer 1

		2021	2022
	Ending Inventory at retail	$       55,400	$       50,750
	Ending Inventory at cost	$       35,950	$       42,744
	Estimated cost of goods sold	$       79,050	$       49,756
	Workings:	2021			2022
		Cost	Retail	Cost to retail Percentage	Cost	Retail	Cost to retail Percentage
	Beginning Inventory	$       28,000	$       40,000		$     35,950
Add:	Net Purchases	$       85,000	$   1,08,000		$     90,000	$ 1,14,000
Add:	Freight In	$         2,000			$       2,500
Add:	Net Markups		$       10,000			8000
Less:	Net Markdowns		$         2,000			2200
	Goods available for sale (excluding beginning inventory)	$       87,000	$   1,16,000	75%	$     92,500	$ 1,19,800	77.21%
	Goods available for sale (including beginning inventory)	$   1,15,000	$   1,56,000		$     92,500	$ 1,55,750
Less:	Net Sales		$   1,00,000			104000
Less:	Employee discount		$             600			1000
	Ending Inventory at retail		$       55,400			$     50,750
	Ending Inventory at base year retail price	$       52,264			$     46,136
	Inventory layers converted to cost	$         7,950			$       6,794
	Inventory layers at base year retail prices	$       28,000			$     35,950
	Estimated ending inventory at cost	$       35,950			$     42,744
	Estimated cost of goods sold	$       79,050			$     49,756