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	$	78,300	$	145,000
Net purchases		111,150		251,000
Net markups				9,000
Net markdowns				13,000
Net sales				230,000
Retail price index, 12/31/18				1.08

Required:
Calculate the estimated ending inventory and cost of goods sold for 2018

Answer 1

Solution:

Brunswick Company - Dollar value LIFO retail inventory
Particualrs	Cost	Retail
Beginning inventory	$78,300.00	$145,000.00
Add: Net Purchases	$111,150.00	$251,000.00
Add: Net markups		$9,000.00
Less: net markdowns		-$13,000.00
Cost of goods available for sale - Excluding Beginning inventory	$111,150.00	$247,000.00
Cost of goods available for sale - Including Beginning inventory	$189,450.00	$392,000.00
Net Sales		$230,000.00
Estimated ending inventory at current year retail price		$162,000.00
Cost to retail percentage - Beginning inventory (Beginning inventory at cost / Beginning inventory at retail)	54%
Cost to retail percentage - Current year (Cost of 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 ($162,000/1.08)		$150,000.00
Ending inventory from last year at base year retail prices		$145,000.00
Ending inventory from current year purchase at base year retail prices		$5,000.00
Ending inventory at Cost:
Ending inventory from last year ($145,000*54%)	$78,300.00
Ending inventory from Current year ($5,000*1.08*45%)	$2,430.00
Ending inventory dollar value LIFO retail cost	$80,730.00
Cost of goods sold ($189,450 - $80,730)	$108,720.00