Question

On January 1, 2021, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2021:
 

	Cost		Retail
Beginning inventory	$	72,900	$	135,000
Net purchases		102,150		232,000
Net markups				5,000
Net markdowns				10,000
Net sales				200,000
Retail price index, 12/31/2021				1.08

Required:
Calculate the estimated ending inventory and cost of goods sold for 2021 using the information provided. (Do not round intermediate calculations.)

Answer 1

step 1)

	cost	retail
begin inventory	72,900	135,000
net purchase	102,150	232,000
net markup		5,000
net markdown		(10,000)
purchases	175,050	362,000
net sales		(200,000)
end inventory at retail		162,000
end inventory at cost	(80,190)
Cost of goods sold	94,860

72,900/135,000= 0.54 or 54%

step 1) 232,000-10,000+5,000=227,000

102,150/227,000= 0.45 or 45%

Step 2) 135,000*54%*1.00= 72,900

step 3) 162,000/1.08= 150,000-135,000= 15,000

15,000*45%*1.08= 7,290

72,900+7,290= 80,190

Answer:

ending inventory at retail= 162,000

ending inventory at cost= 80,190

cost of goods sold= 94,860