Waterway Inc. had beginning inventory of $11,660 at cost and $22,000 at retail. Net purchases were $101,640 at cost and $167,100 at retail. Net markups were $10,000, net markdowns were $7,700, and sales revenue was $137,100. Compute ending inventory at cost using the LIFO retail method. (Round ratios for computational purposes to 1 decimal place, e.g. 78.7% and final answer to 0 decimal places, e.g. 28,987.)
Ending inventory using LIFO retail method?
Solution:
LIFO Retail Method | |||
Cost | Retail | Cost to Retail ratio | |
Beginning Inventory | $11,660.00 | $22,000.00 | |
Add: Purchases | $101,640.00 | $167,100.00 | |
Add: Net Markups | $10,000.00 | ||
Less: Net Markdowns | -$7,700.00 | ||
Goods Available for Sale (excluding beginning inventory) | $101,640.00 | $169,400.00 | |
Goods Available for Sale (including beginning inventory) | $113,300.00 | $191,400.00 | |
Cost-to-retail Percentage ($101,640/169400) | 60.0% | ||
Net Sales | -$137,100.00 | ||
Estimated Ending Inventory at Retail | $54,300.00 | ||
Estimated Ending Inventory at Cost | $31,040.00 | ||
Estimated Ending Inventory at Cost (Working): | |||
Retail | Cost | ||
Beginning Inventory | $22,000.00 | $11,660.00 | |
Current Period's Layer | $32,300.00 | $19,380.00 | |
Total | $54,300.00 | $31,040.00 |
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