Question

On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following...

On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2018:

Cost Retail
Beginning inventory $ 73,500 $ 147,000
Net purchases 106,400 271,000
Net markups 5,000
Net markdowns 10,000
Net sales 245,000
Retail price index, 12/31/18 1.05


Required:
Calculate the estimated ending inventory and cost of goods sold for 2018.
1. ending inventory at retail

2. ending inventory at cost

3. cost of goods sold

Business   Accounting   
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Answer #1
Cost Retail
Beginning inventory 73,500 147,000
Net purchases 106,400 271,000
Net markups 5,000
Less: Net markdowns -10,000
Goods available for sale (excluding beginning inventory) 106,400 266,000
Goods available for sale (including beginning inventory) A 179,900 413,000
Less
Net sales -245,000
Estimated Ending Inventory at retail $168,000
Estimated Ending Inventory at cost B 78960
Estimated Cost of Good Sold A-B 100,940
working
Estimated Ending Inventory at cost
(168000/1.05)= $160000
147000*1*50% 73500
(160000-147000)*1.05*40% 5460
Ending Invntory 78960
Base year cost to retial (beginning inventory)
73500/147000*100 50 %
Cost to Retail % 2018 40
106400/266000
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