Question

15) Murdock Industries uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following data has been summarized for December 31, 2018: Inventory, January 1 Purchases Net markups Net markdowns Net sales Cost Retail $ 116,000 $ 165,000 355,000 540,000 15,600 9,800 522,000 Required: Estimate the LIFO cost of ending inventory. Assume stable retail prices during the period. (4 pts) Show your work or you will lose 1 point. 16) Harley Inc. uses the conventional retail method to estimate its ending inventories. The following data has been summarized for December 31, 2018: Inventory, January 1 Purchases Net markups Net markdowns Normal spoilage Net sales Cost Retail $ 208,000 $ 280,000 00470,000 610,000 15,300 11,200 4,600 489,500 Required: Estimate the cost of ending inventory applying the conventional retail method. (3 pts) Show your work or you will lose 1 point. ooooo Page 7

Answer 1

Answer cost Retail $165,000 Inventory, January ! $116,000 940,000 355000 Net purchases 15600 Nek markups (9800) len: Net mark docony $ 545800 Goods available for sale $355000 (Excluding beginning inventory) $710,800 $471,000 Goods available for sale Cincluding beginning mwen tone) (5224000) Net sales $188800 Ending inventory at retail $355500 = 65°4 cost to relal percentage $ 545,800 Estimated Ending mventou at cost :- Retail $ 165000 23000X 65%. = cost $116,000 $8019470 Beginning invertory Current periods layer $ 188,800 $134470 Total .. cost of ending Inventory = $ 131,470

cost Retou $ 280,000 $208,000 Inventory, Janucory I Net purchases 610,000 470,000 15300 net markeps 0905,300 $ 678,000 cost to Relal. 867800, 14.9.6. percentage $905300 (11200) less: Net mark downs $894,160 Goods available (46oo) less: Normal spollage 489,500) less: Net sales $ 400,000 Ending nuentory at retail $299,600 Ending inventory at cost ($409000X 74•9•6)