A firm adopted the dollar value LIFO retail method on 1/1/X8 (at which time the

Question

A firm adopted the dollar value LIFO retail method on 1/1/X8 (at which time the price index was 100) and presents the following data. 10. DATA FOR COSTING INVENTORY USING DOLLAR VALUE LIFO RETAIL METHOD Cost Retail 50,000$ 200,000 January 1, 20X8 Inventory Purchases Net Markups Net Markdowns Sales 100,000 420,000 20,000 10,000 400,000 The ending price index for 20X8 is 108. What is the company's ending inventory that should be reported in its financial statements? (a) $60,230 (b) $56,410. (c) $70,454. (d) $62,347.

Explanation / Answer

Correct answer is D

Dollar value LIFO retail method 2018 Cost retail Beginning inventory 50000 100000 Purchases 200000 420000 Net markups 20000 Less Net mark downs -10000 Cost of goods available for sale 250000 530000 Less Sales 400000 Ending inventory 130000 X cost to retail ratio 0.47 Ending inventory 61321 Beginning 50000*100% 50000 Layer added 11321*108% 12347 62347

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