Question

To prepare the store’s financial statements at June 30, 2017, you obtain the following data.

Cost Selling Price Inventory, January 1 $32,700 $41,600

Markdowns 11,400 Markups 8,700

Markdown cancellations 6,500

Markup cancellations 3,400

Purchases 99,228 152,600

Sales revenue 153,200

Purchase returns 2,700 3,700

Sales returns and allowances 8,300

Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $54,000 at retail and the ratio of cost to retail to be 78.61%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Compute the June 30, 2017, inventory at the June 30 price level under the dollar-value LIFO retail method. (Round ratios for computational purposes to 2 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)

Answer 1

Ans-Prepare a schedule to complete the June 30,2017 inventory at the June 30 price level under the dollar- value LIFO retail method:-

Ending inventory at Base-Year Retail Prices- 2017	Year	Layers at Base- Year Retail Prices	Price Index (Percentage)	Cost-to-Retail (Percentage)	Ending Inventory at LIFO Cost
$50,000 ($54,000/108*100)	2016	41,600	100%	78.61%	$32,702
	2017	8,400	108%	78.61%	7,131
Total		$50,000			$39,833

Note:-

Particulars	Amount
Ending inventory at retail price deflated to base- year prices ($54,000/108*100)	$50,000
Deduct: Beginning inventory (retail) at base- year prices	$41,600
Inventory increase (retail) from beginning period	$8,400