Question

# Blossom Company, which uses the retail LIFO method to determine inventory cost, has provided the following...

Blossom Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2020:

 Cost Retail Inventory, 1/1/20 \$ 292000 \$430000 Net purchases 1234000 1786000 Net markups 214000 Net markdowns 100000 Net sales 1690000

Assuming that the price index was 105 at December 31, 2020 and 100 at January 1, 2020, what is the cost of Blossom's inventory at December 31, 2020 under the dollar-value-LIFO retail method? (Hint: Round intermediate calculation to 2 decimal places, e.g. 0.63 and final answer to 0 decimal places.)

 \$609524.
 \$408691.
 \$414525.
 \$480500.

 Cost Retail Beginning Inventory, 1/1/2020 292,000 430,000 Add: Net Purchases 1,234,000 1,786,000 Add: Net markups 214,000 Less: Net markdowns (100,000) Goods available for sale (excluding beginning inventory) 1,234,000 1,900,000 Goods available for sale (including beginning inventory) 1,526,000 2,330,000 Less: Net sales (1,690,000) Ending inventory at current year retail prices 640,000 Estimated ending inventory at cost (428,500) Estimated cost of goods sold 1,097,500 Base year cost-to-retail percentage (292,000/430,000) 0.68 Current year cost-to-retail percentage 0.65

.

 Ending inventory at Year-end Retail Prices Inventory Layers at Base year Retail Prices Inventory Layers Converted to Cost 640,000 430,000 292,000 210,000 136,500 (210,000*0.65) 640,000 428,500

Cost of Bloosom's inventory at December 31, 2020 = 428,500

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