
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Required information
[The following information applies to the questions displayed below.]
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available
information follows:
a. The inventory at January 1, 2019, had a retail value of $43,000 and a cost of $33,210 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
$249,510
6,300
4,800
26,500
Retail
$470,000
22,000
446,500
8,000
4,500
23,000
22,000
Sales to employees are recorded net of discounts.
c. The retail value of the December 31, 2020, inventory was $55,080, the cost-to-retail percentage for 2020 under the
LIFO retail method was 76%, 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 $47,250, the cost-to-retail percentage for 2021 under the LIFO
retail method was 75%, and the appropriate price index was 105% of the January 1, 2020, price level.](https://content.bartleby.com/qna-images/question/87f377c8-556b-40c3-ad73-583aac17d9d0/ac117d3a-b7dd-40fa-a235-3dbb2274c1ea/470ks7_thumbnail.png)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available
information follows:
a. The inventory at January 1, 2019, had a retail value of $43,000 and a cost of $33,210 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
$249,510
6,300
4,800
26,500
Retail
$470,000
22,000
446,500
8,000
4,500
23,000
22,000
Sales to employees are recorded net of discounts.
c. The retail value of the December 31, 2020, inventory was $55,080, the cost-to-retail percentage for 2020 under the
LIFO retail method was 76%, 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 $47,250, the cost-to-retail percentage for 2021 under the LIFO
retail method was 75%, and the appropriate price index was 105% of the January 1, 2020, price level.

Transcribed Image Text:Required:
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for
2020 and 2021.
Total ending inventory at dollar-value LIFO retail cost, 2020
Total ending inventory at dollar-value LIFO retail cost, 2021
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- Presented below is information related to Splish Company. December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 2022 2023 Date 2024 2025 2026 2027 $ $ $ $ $ Ending Inventory (End-of-Year Prices) $ $83,600 117,832 Compute the ending inventory for Splish Company for 2022 through 2027 using the dollar-value LIFO method. 116,501 131,709 157,765 190,224 Ending Inventory 83,600 207,802 Price Index 100 100 104 119 129 139 144arrow_forwardOn January 1, 2019, Lexor Company adopted the dollar-value-LIFO method of inventory costing. Lexor's ending inventory records appear as follows: Year Current cost Index 2019 $ 42,000 100 (1.00) 2020 58,000 110 (1.10) 2021 60,100 120 (1.20) 2022 68,200 130 (1.30) Compute the ending inventory for the years 2019, 2020, 2021, and 2022, using the dollar-value LIFO method. Round to the nearest dollar. Show all work. You can use the previous homework template that you used forarrow_forwardPROBLEM 1. Wharf Company uses a perpetual inventory system and values its inventory at lower of cost or market. Its accounting records indicate the following information relating to inventory: Inventory Cost $ 60,000 Date January 1, 2019 December 31, 2019 December 31, 2020 Market $ 60,000 102,000 88,000 115,000 109,000 Required: Prepare the required journal entries at December 31, 2019, and December 31, 2020, to record the inventory at lower of cost or market using the following methods: a. Direct method b. Allowance methodarrow_forward
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