Question

Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2018. Information for 2018 and 2019 is as follows, with certain data intentionally omitted:

Required:
Determine the missing data. (Round "Cost-to-Retail Percentage" to the nearest whole percent (i.e., 0.1234 should be entered as 12%).)

	Inventory Retail Cost-to-Retail Date Cost Retail Price Index Percentage Inventory, 1/1/2018 $32,400 $45,000 1.00 72% Inventory, 12/31/2018 33,240 48,300 1.05 80% 2019 net purchases 71,240 104,000 2019 net sales 92,300 Inventory, 12/31/2019 ? 60,000 1.20

Answer 1

Date	Cost	Retail	Retail Price Index	Cost to retail Percentage
Inventory, 1/1/2018	$                         32,400	$      45,000	1.00	72%
Inventory, 12/31/2018	$                         33,240	$      48,300	1.05	80%
2019 net Income	$                         71,240	$   1,04,000
2019 net sales		$      92,300
Inventory, 12/31/2019	$                         36,528	$      60,000	1.20
2018 =
Ending Inventory at retail		$      48,300
Ending Inventory at base year retail price	($48300/1.05)	$      46,000
Increase in Inventory	($46000 - $45000)	$         1,000
Inventory converted to retail	($1000*1.05)	$         1,050
Inventory added at cost	($32400 - $33240)	$            840
Cost to retail Percentage	($840 / $1050)	80%
2019 =
Ending Inventory at retail		$      60,000
Ending Inventory at base year retail price	($60000/1.20)	$      50,000
Increase in Inventory	($50000 - $46000)	$         4,000
Inventory converted to retail	($4000*1.20)	$         4,800
Cost to retail Percentage	($71240 / $104000)	69%
Inventory added at cost	($4800 * 69%)	$         3,288
Inventory, 12/31/2018	$                         48,300
Add: net Income	$                     1,04,000
Less: net sales	$                         92,300
Ending Inventory at Retail	$                         60,000
Beginning Inventory	($45000 X 1 X 72%)	$      32,400
Inventory added at cost in 2018		$            840
Inventory added at cost in 2019		$         3,288
Ending Inventory at cost		$      36,528

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