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Only need requirment 3.thank you Raleigh Department Store uses the conventional

ID: 2577790 • Letter: O

Question

Only need requirment 3.thank you

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows 0.45 points a. The inventory at January 1, 2016, had a retail value of $49,000 and a cost of $34,380 based on the conventional retail method b. Transactions during 2016 were as follows Retail $323,040 $530,000 14,000 Cost Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns 6,300 5,400 eBook 509,500 10,000 5,000 28,500 Print 29,000 14,000 References Sales to employees are recorded net of discounts c. The retail value of the December 31, 2017, inventory was $85,330, the cost-to-retail percentage for 2017 under the LIFO retail method was 69%, and the appropriate price index was 106% of the January 1, 2017, price level d. The retail value of the December 31, 2018, inventory was $52,320, the cost-to-retail percentage for 2018 under the LIFO retail method was 68%, and the appropriate price index was 109% of the January 1, 2017, price level Required 1. Estimate ending inventory for 2016 using the conventional retail methood 2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retal method 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018

Explanation / Answer

Date

Inventory at end of the year

Price Index

Inventory at base year price

Change from prior year

December 31, 2016

$51,340

100

$51,340

0

December 31, 2017

$85,330

106

$80,500

$29,160

December 31, 2018

$52,320

109

$48,000

-$32,500

Computation of Dollar value inventory

               

                December 31, 2017

                $51,340 at 1                                        $51,340

                $29,160 at $1.06                                $30,909.6

                                                                                $82,249.6

               

                December 31, 2018        

                $51,340 at 1                                        $51,340

                $51,340 at $1.06                                $54,420.4

                                                                                $105,760.4

Please note: The price index of 2017 has been used because no layer has been formed during the year 2018. The ending inventory at base-year-prices ($48,000) is less than the beginning inventory at base-year-prices ($80,500), hence base price of 2016 $51,340 has been used for determining dollar value for 2018

Date

Inventory at end of the year

Price Index

Inventory at base year price

Change from prior year

December 31, 2016

$51,340

100

$51,340

0

December 31, 2017

$85,330

106

$80,500

$29,160

December 31, 2018

$52,320

109

$48,000

-$32,500