Data below for the year ended December 31, 2016, relates to Houdini Inc. Houdini

Question

Data below for the year ended December 31, 2016, relates to Houdini Inc. Houdini started business January 1, 2016, and uses the LIFO retail method to estimate ending inventory.

                                  Cost               Retail

Beginning inventory   $76,000      $110,000

Net purchases        324,760           480,000

Net markups                                   26,000

Net markdowns                               46,000

Net sales                                        429,000

Estimated ending inventory at retail is:

$183,360.

$77,000.

$31,000.

$141,000

Please show work.

Explanation / Answer

Answer: $141000

particulars cost ($) retail ($) beginnign inventory 76000 110000 Net purchases 324760 480000 Marchandise available for sale 400760 590000 Add: mark up 26000 616000 Deduct: markdown -46000 570000 deduct: net sales -429000 ending inventory in retail 141000

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