On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail invent
ID: 2329651 • Letter: O
Question
On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2018 and 2019 are as follows: 2018 2019 CostiiRetailCost:. Retail Beginning inventory Net purchases Freight-in Net markups Net markdowns Net sales to customers sales to employees (net of 20% discount) Price Index s 51,800 74,000 101,150 125,000 $107,532 $131,700 3,700 4,200 18,500 3,700 125,250 3,000 11,400 3,900 118,800 6,720 January 1, 2018 December 31, 2018 December 31, 2019 1.00 1.06 1.10 Required: Estimate the 2018 and 2019 ending inventory and cost of goods sold using the dollar-value LIFO retalil inventory method. (Do not round other intermediate calculations. Round your cost-to-retail percentage calculations to 2 declmal places and final answers to the nearest whole dollar) 2018 2019 Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods soldExplanation / Answer
2018 2019 Cost Retail Cost Retail Beginning inventory 51800 74000 58233 84050 Plus: Net purchases 101150 125000 107532 131700 Frieght in 3700 4200 Net markups 18500 11400 Less: Net markdowns 3700 3900 Employee discount (Note:1) 750 1680 Goods available for sale (excluding beginning inventory) 104850 139050 111732 137520 Goods available for sale (including beginning inventory) 156650 213050 169965 221570 Base layer cost to retail % 70% 69.28% (51800/74000) (58233/84050) 2013 layer cost to retail % 75.40% 81.25% (104850/139050) (111732/137520) Less: Net sales Customers 125250 118800 Employees (At gross price) 3750 8400 Ending inventory at retail price 84050 94370 Ending inventory at cost (Note:2) 58233 65224 Cost of goods sold (Goods availabke for sale-Ending inventory) 98417 104741 Note:1 -Computation of discount 2018 2019 Discount @ 20% 20% Net price 3000 6720 Gross price 3750 8400 (3000/80%) (6720/80%) Discount (Gross price-Net price) 750 1680 Note:2- Value of ending inventory 2018 Ending inventory at retail price=$ 84050 Ending inventory at base year retail price=$ 84050/1.06=$ 79292 Inventory layers at base year retail prices: Beginning inventory 51800*1 51800 Balance (79292-51800)*1.06 29142 Converted to cost: Inventory layers at base year retail prices: Cost to retail % Cost Beginning inventory 51800 70% 36260 Balance 29142 75.40% 21973 Total cost 58233 2019 Ending inventory at retail price=$ 94370 Ending inventory at base year retail price=$ 94370/1.10=$ 85791 Inventory layers at base year retail prices: Beginning inventory 56989*1 56989 Balance (85791-56989)*1.10 31682 Converted to cost: Inventory layers at base year retail prices: Cost to retail % Cost Beginning inventory 56989 69% 39482 Balance 31682 81.25% 25742 Total cost 65224