Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2018 operations is as follows: a. January 1, 2018, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2018 cost $1,387,500 with an original retail value of $2,000,000. c. Freight costs were $10,000 for incoming merchandise. d. Net additional markups were $300,000 and net markdowns were $150,000. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value. f. Merchandise is sold to employees at a 20% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2018 is $250,000. g. Sales to customers totaled $1,750,000 for the year. Required: 1. Estimate ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retail percentage calculation to whole dollars.) 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. (Assume stable prices.) Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Conventional Retail Method LIFO Retail Method

Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2018 operations is as follows: a. January 1, 2018, beginning inventory had a cost of $100,000 and a retail value of $150,000. b. Purchases during 2018 cost $1,387,500 with an original retail value of $2,000,000. c. Freight costs were $10,000 for incoming merchandise. d. Net additional markups were $300,000 and net markdowns were $150,000. e. Based on prior experience, shrinkage due to shoplifting was estimated to be $15,000 of retail value. f. Merchandise is sold to employees at a 20% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2018 is $250,000. g. Sales to customers totaled $1,750,000 for the year. Required: 1. Estimate ending inventory and cost of goods sold using the conventional retail method. (Round your cost-to-retail percentage calculation to whole dollars.) 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. (Assume stable prices.) Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold Conventional Retail Method LIFO Retail Method

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...

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