Homework Answers
| Cost price | Retail price | |
| Net purchases | $408,690 | $590,000 |
| Markups | $37,000 | |
| Markdowns | ($57,000) | |
| Total | $408,690 | $570,000 |
Cost to retail ratio = $408,690 / $570,000
= 71.7%
| Retail price total | $570,000 |
| Beginning inventory | $121,000 |
| Sales | ($528,000) |
| Ending inventory at retail | $163,000 |
| LIFO layer added | $42,000 ($163,000-$121,000) |
Ending inventory at cost = $88,000 + ($42,000 * 71.7%)
= $118,114
The answer is B.
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