Question

On January 1, 2021, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2021: Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/2021 Cost Retail $ 81,400 $140,000 101,200 261,000 6,000 14.000 233,000 1.05 Required: Calculate the estimated ending inventory and cost of goods sold for 2021 using the information provided. (Do not round intermediate calculations.) Ending inventory at retail Ending inventory at cost Cost of goods sold

Answer 1

Answer

Ending Inventory at Retail	$168,000
Ending Inventory at Cost	$86,440
Cost of Goods Sold	$96,160

--Working

	Cost	Retail	Cost to retail %
Beginning Inventory	$81,400	$148,000	55.000%
Net Purchases	$101,200	$261,000
Net Mark ups		$6,000
Net Mark downs		($14,000)
Purchases	$101,200	$253,000	40.000%
Goods available for sale	$182,600	$401,000
Net Sales		($233,000)
Ending Inventory at Retail		$168,000
Ending Inventory at Cost	($86,440)
Cost of Goods Sold	$96,160

	Step 1	Step 2	Step 3
Ending Inventory at Year end retail prices	Ending Inventory at Year end BASE YEAR retail prices	Inventory Layer at base year retail prices	Inventory Layers converted to cost
$168,000	$160,000	$148,000	$81,400	[148000 x 55% x 1.00]
	[ 168000 / 1.05 ]	$12,000	$5,040	[12000 x 40% x 1.05]
Total ending Inventory at dollar value LIFO retail cost			$86,440