Question

Data below for the year ended December 31, 2018, relates to Houdini Inc. Houdini started business...

Data below for the year ended December 31, 2018, relates to Houdini Inc. Houdini started business January 1, 2018, and uses the LIFO retail method to estimate ending inventory.
   

Cost Retail
Beginning inventory $ 76,000 $ 114,000
Net purchases 355,000 520,000
Net markups 30,000
Net markdowns 50,000
Net sales 465,000

     
Estimated ending inventory at retail is:

Multiple Choice

  • $35,000.

  • $85,000.

  • $149,000.

  • $197,280.



    Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
       

    Cost Retail
    Beginning inventory $ 57,000 $ 74,000
    Net purchases 165,000 237,000
    Net markups 33,000
    Net markdowns 46,000
    Net sales 231,000

       
    The conventional cost-to-retail percentage (rounded) is:

    Multiple Choice

  • 84.1%.

  • 71.4%.

  • 64.5%.

  • 74.5%

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