a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 6,500 5,600 29,500 Retail $550,000 16,000 544,000 5,000 6,000 31,000 16,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2020, price level. Required: 1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Raleigh Department Store uses the conventionalretail method for the year ended December 31, 2019. Available information follows .

Answer both parts .

a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail
method.
b. Transactions during 2019 were as follows:
Gross purchases
Purchase returns
Purchase discounts
Gross sales
Sales returns
Employee discounts
Freight-in
Net markups
Net markdowns
Cost
$344,940
Beginning inventory
Add: Purchases
Add: Freight-in
Less: Purchase returns.
Add: Net markups
6,500
5,600
Goods available for sale
29,500
Sales to employees are recorded net of discounts.
c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the
LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level.
d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO
retail method was 74%, and the appropriate price index was 105% of the January 1, 2020, price level.
Retail
$550,000
16,000
Required:
1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a
minus sign.)
$
544,000
5,000
6,000
$
31,000
16,000
Cost
38,060 $
344,940
29,500
(6,500)
406,000
Retail
51,000
550,000
(16,000)
585,000
585,000
Cost-to-Retail
Ratio
Transcribed Image Text:a. The inventory at January 1, 2019, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. b. Transactions during 2019 were as follows: Gross purchases Purchase returns Purchase discounts Gross sales Sales returns Employee discounts Freight-in Net markups Net markdowns Cost $344,940 Beginning inventory Add: Purchases Add: Freight-in Less: Purchase returns. Add: Net markups 6,500 5,600 Goods available for sale 29,500 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2020, inventory was $60,180, the cost-to-retail percentage for 2020 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2020, price level. d. The retail value of the December 31, 2021, inventory was $51,450, the cost-to-retail percentage for 2021 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2020, price level. Retail $550,000 16,000 Required: 1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.) $ 544,000 5,000 6,000 $ 31,000 16,000 Cost 38,060 $ 344,940 29,500 (6,500) 406,000 Retail 51,000 550,000 (16,000) 585,000 585,000 Cost-to-Retail Ratio
Cost-to-retail percentage
Less: Net sales
Sales
Sales returns
Employee discounts
Estimated ending inventory at retail
Estimated ending inventory at cost
Beginning inventory
Required:
2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted
should be indicated with a minus sign.)
Goods available for sale (excluding beginning inventory)
Goods available for sale (including beginning inventory)
Cost-to-retail percentage
$
Less: Net sales
Sales
Sales returns
Employee discounts
Estimated ending inventory at retail
Estimated ending inventory at cost
585,000
$
Cost
0
$
Retail
0
0
Cost-to-Retail
Ratio
Transcribed Image Text:Cost-to-retail percentage Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Beginning inventory Required: 2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted should be indicated with a minus sign.) Goods available for sale (excluding beginning inventory) Goods available for sale (including beginning inventory) Cost-to-retail percentage $ Less: Net sales Sales Sales returns Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost 585,000 $ Cost 0 $ Retail 0 0 Cost-to-Retail Ratio
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