Answered: Compute the cost of the 2025 ending…

Name: Cullumber Company began operations late in 2024 and adopted the conven
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Cullumber Company began operations late in 2024 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2024 and no markdowns during 2024, the ending inventory for 2024 was $13,818 under both the conventiona

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 11P: Olson Company adopted the dollar-value LIFO method for inventory valuation at the beginning of 2015....

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Cullumber Company began operations late in 2024 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2024 and no markdowns during 2024, the ending inventory for 2024 was $13,818 under both the conventional retail method and the LIFO retail method. At the end of 2025 , management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2025. The following data are available for computations. \table[[,Cost,Retail],[Inventory, January 1, 2025,$13,818,$20,500

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Cullumber Company began operations late in 2024 and adopted the conventional retail inventory method. Because there was no
beginning inventory for 2024 and no markdowns during 2024, the ending inventory for 2024 was $13,818 under both the
conventional retail method and the LIFO retail method. At the end of 2025, management wants to compare the results of applying the
conventional and LIFO retail methods. There was no change in the price level during 2025. The following data are available for
computations.
Cost
Retail
Inventory, January 1, 2025 $13,818
$20,500
Sales revenue
78,000
Net markups
8,800
Net markdowns
1,700
Purchases
60,100
79,000
Freight-in
1,892
Estimated theft
1,900
Compute the cost of the 2025 ending inventory under both:
(a) The conventional retail method.

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