Question

On January 1, 2021, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2021 and 2022 are as follows: Beginning inventory Net purchases Freight-in Net markups Net markdowns Net sales to customers Sales to employees (net of 20% discount) Price Index: January 1, 2021 December 31, 2021 December 31, 2022 2021 2022 Cost Retail Cost Retail $ 48,000 $ 64,000 103,040 120,000 $115,150 $133,000 3,200 3,700 16,000 10,400 3,200 3,400 117,850 119,440 3,800 5,920 1.00 1.06 1.12 Required: Estimate the 2021 and 2022 ending inventory and cost of goods sold using the dollar-value LIFO retail inventory method. (Do not round other intermediate calculations. Round your cost-to-retail percentage calculation to 2 decimal places and final answers to the nearest whole dollar.) 2021 2022 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold

Answer 1

Particulars	2021		Cost to Retail Ratio	2022		Cost to Retail Ratio
	Cost	Retail		Cost	Retail
Beginning Inventory	$   48,000	$   64,000	75.00%	$   53,088	$   74,200
Purchase	$ 103,040	$ 120,000		$ 115,150	$ 133,000
Freight In	$      3,200			$      3,700
Net Markup		$   16,000			$   10,400
Net markdown		$    -3,200			$    -3,400
Excluding Beginning Inventory	$ 106,240	$ 132,800	80.00%	$ 118,850	$ 140,000	84.89%
Goods available	$ 154,240	$ 196,800		$ 171,938	$ 214,200
Less : Net Sales		$ 122,600			$ 126,840
Ending Inventory	$   53,088	$   74,200		$   60,694	$   87,360
Estimated cost of goods sold	$ 101,152			$ 111,244
Ending Inventory :
At retail Price		$   74,200			$   87,360
Restate to base year retail		$   70,000	$74,200 / 1.06		$   78,000	$87,360 / 1.12
Layer 1 : $64,000 * 75%		$   48,000			$   48,000
Layer 2 : $6,000 * 1.06 * 80%		$      5,088			$      5,088
Layer 3 : $8,000 * 1.12 * 84.89%		$             -			$      7,606
		$   53,088			$   60,694