Question

Sheridan Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,000 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level.

		Cost			Retail
Inventory, Jan. 1, 2020		$38,000			$59,000
Markdowns (net)					13,000
Markups (net)					22,300
Purchases (net)		128,300			180,200
Sales (net)					166,400

	SOlve for Ending inventory LIFO retail method

Answer 1

PgO Answar * cost of Ending inventory at 2020 using the LIFO retail method : Cost Retail $38,000 $ 59,000 $ 128,300 $ 180,200 Beginning inventory purchases Net markups Net markdowns Total (excluding beginning invertory) Total (including beginning inventory). sales . Ending inventory at retaid $128,300 $ 22,300 ($ 13,000) $189500 $ 248500 C9 166,400) $ 8.2100 $166300 Cost to Detail natio - $ 128, 300 loo $189 son = 67.701. s'in 2019; cost to retail ratio = 38,000 X 100 59,000 64.401.

Ending inventory out retain = $82100 Toloe ding inventory $ 59,000 X 64.409/. = $37996 2020 Cost of Ending inventory = (82100 -59,000 ) X 67. 704. = 23100 X 67.70"/. = $15638.7 Total = 37996+15638.7 =53634.7. ~ 53635 .. cost do Ending invertory =$53635 (01) $63634.7