value: 1.00 points On January 1, 2016, the Brunswick Hat Company adopted the dol

Question

value: 1.00 points On January 1, 2016, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2016: Cost Retail Beginning inventory Net purchases Net markups Net markdowns Net sales Retail price index, 12/31/16 $75,040 $134,000 105,750 228,000 9,000 12,000 212,000 1.05 Required Calculate the estimated ending inventory and cost of goods sold for 2016 Answer is complete but not entirely correct. Ending inventory at $147,000 retail Ending inventory at cost Cost of goods sold |$ 77,962 $102.828

Explanation / Answer

cost Retail Beginning inventory 75,040 134,000 Add:net purchases 105,750 228,000 Add:net mark-ups 9,000 less:net mark -downs -12,000 goods avaialble for sale (excluding beginning inventory) 105,750 225,000 goods available for sale (including beginning inventory) 180,790 359,000 Base year cost to retail percentage 75040/134000= 56.00% 2016 cost to retail percentage 105,750/225000= 47.00% less:net sales 212,000 Estimated ending inventory at current year retail prices 147,000 step 1 Step 2 Step 3 ending inventory ending inventory inventory at yr end inventory layers layers retail prices at base at base converted yr retail yr retail to prices prices cash 147,000 147000/1.05 134,000 (base) *1*56%= 75040 140000 6,000 2016 *1.05*47%= 2961 total ending inventory at dollar -value LIFO retail cost 78001 cost of goods sold cost of total inventory 180,790 less:cost of ending inventory (LIFO) -78001 cost of goods sold 102,789

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