Question

# Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available...

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

1. The inventory at January 1, 2019, had a retail value of \$31,000 and a cost of \$11,000 based on the conventional retail method.
2. Transactions during 2019 were as follows:
 Cost Retail Gross purchases \$ 570,000 \$ 953,000 Purchase returns 6,000 4,000 Purchase discounts 5,000 Gross sales 958,000 Sales returns 5,000 Employee discounts 3,000 Freight-in 20,000 Net markups 20,000 Net markdowns 4,000

Sales to employees are recorded net of discounts.

1. The retail value of the December 31, 2020, inventory was \$48,150, the cost-to-retail percentage for 2020 under the LIFO retail method was 42%, and the appropriate price index was 107% of the January 1, 2020, price level.
2. The retail value of the December 31, 2021, inventory was \$43,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 41%, and the appropriate price index was 110% of the January 1, 2020, price level.

Required:
3.
Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

Solution 3:

 Solution 3: Raleigh Department Store Dollar-Value LIFO Retail Method Ending Inventory at Year-end Retail Prices Ending Inventory at Base Year Retail Prices Inventory Layers at Base Year Retail Prices Inventory Layers Converted to Cost Year 2020 48150 45000 40,000.00 16400 5,000.00 2247 Total Ending Inventory at dollar-value LIFO retail Cost 18647 Year 2021 43450 39500 39500 16195 Total Ending Inventory at dollar-value LIFO retail Cost 16195

#### Earn Coins

Coins can be redeemed for fabulous gifts.