Question

As of January 1, 2017, Coronado Inc. adopted the retail method of accounting for its merchandise inventory. To prepare the store’s financial statements at June 30, 2017, you obtain the following data. Cost Selling Price Inventory, January 1 $29,100 $39,600 Markdowns 10,100 Markups 9,800 Markdown cancellations 7,000 Markup cancellations 2,900 Purchases 112,070 155,300 Sales revenue 154,500 Purchase returns 2,500 3,700 Sales returns and allowances 7,300 Part 1 Compute Coronado’s June 30, 2017, inventory under the conventional retail method of accounting for inventories. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Inventory under the conventional retail method Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $61,560 at retail and the ratio of cost to retail to be 73.48%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Compute the June 30, 2017, inventory at the June 30 price level under the dollar-value LIFO retail method. (Round ratios for computational purposes to 2 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Answer 1