Question

On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2018: Cost Retail Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/18 81,000 $150,000 121,500 278,000 8,000 16,000 228,000 1.20 Required Calculate the estimated ending inventory and cost of goods sold for 2018. Ending inventory at retail Ending inventory at cost Cost of goods sold $ 192,000 86,280 S 105,270

Answer 1

Answer:

Brunswick Company - Dollar value LIFO retail inventory
Particualrs	Cost($)	Retail($)
Beginning inventory	81,000	1,50,000
Add: Net Purchases	1,21,500	2,78,000
Add: Net markups		8,000
Less: net markdowns		-16,000
Cost of goods available for sale - Excluding Beginning inventory	1,21,500	2,70,000
Cost of goods available for sale - Including Beginning inventory	2,02,500	4,20,000
Net Sales		2,28,000
Estimated ending inventory at current year retail price		1,92,000
Cost to retail percentage - Beginning inventory (Beginning inventory at cost / Beginning inventory at retail)	54%
Cost to retail percentage - Current year (Cost og goods available for sale at cost- excluding beginning inventory / Cost of goods available for sale at retail - excluding beginning inventory)	45%
Ending inventory at base year retail prices		1,60,000
($192,000/1.20)
Ending inventory from last year at base year retail prices		1,50,000
Ending inventory from current year purchase at base year retail prices		10,000
Ending inventory at Cost:
Ending inventory from last year ($150,000*54%)	$81,000
Ending inventory from Current year ($10,000*1.20*45%)	$5,400
Ending inventory dollar value LIFO retail cost	$86,400
Cost of goods sold ($202,500- $86,400)	$1,16,100

Estimated ending inventory at current year retail price	$192,000
Ending inventory dollar value LIFO retail cost	$86,400
Cost of goods sold	$116,100