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Problem Conventional and LIFO Retail Method.* *This topic

Customer Question

Problem — Conventional and LIFO Retail Method.**This topic is dealt with in more detail in the Appendix of chapter 9.Memorial Book Store uses the conventional retail method.
Instructions
Given the following data, prepare a neat, labeled schedule showing the computation of the cost of inventory on hand at 12/31/04.

         Cost             Retail     
Inventory 1/1/04 $ 36,100     $ 50,000
Purchases     346,400                      600,000
Purchases Returns     9,000               20,000
Purchase Discounts     7,000
Sales (Gross)                             625,000
Sales Returns                              20,000
Employee Discounts                       5,000
Freight-in     23,500
Freight-out     50,000
Loss from Breakage                       2,500
Markups                                       38,000
Markup Cancellations                        18,000
Markdowns                                13,500
Markdown Cancellations                        8,500


B.     Memorial Book Store has decided to switch to the LIFO retail method for the period beginning 1/1/05.
Instructions
Prepare a schedule showing the computation of the 12/31/05 inventory under the LIFO retail method adjusted for price level changes (i.e., dollar-value LIFO Retail.) Without prejudice to your answer in requirement A above, assume that the 12/31/04 inventory computed under the LIFO Retail method was $50,000 and $33,500 at retail and cost, respectively, for purposes of this requirement. Data for 2005 follows:
        Cost                         Retail     
     Purchases (net)     $375,000     $495,000
     Sales (net)                  460,000
     Markups (net)                  20,000
     Markdowns (net)                  15,000
     2004 Price Index     100
     2005 Price Index     120



Submitted: 6 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 6 years ago.

Hello

 

The problem is not complete. Please post the full question. Is this from Managerial Accounting 13th edition? If yes, what is the problem number please?

Customer: replied 6 years ago.
hello,
This a question for my homework. I am taking Intermediate Accounting 13th edition. I copy/paste the text as it was sent by my teacher:

Problem — Conventional and LIFO Retail Method.*

*This topic is dealt with in more detail in the Appendix of chapter 9.

Memorial Book Store uses the conventional retail method.

Instructions
Given the following data, prepare a neat, labeled schedule showing the computation of the cost of inventory on hand at 12/31/04.

Cost Retail
Inventory 1/1/04 $ 36,100 $ 50,000
Purchases 346,400 600,000
Purchases Returns 9,000 20,000
Purchase Discounts 7,000
Sales (Gross) 625,000
Sales Returns 20,000
Employee Discounts 5,000
Freight-in 23,500
Freight-out 50,000
Loss from Breakage 2,500
Markups 38,000
Markup Cancellations 18,000
Markdowns 13,500
Markdown Cancellations 8,500


B. Memorial Book Store has decided to switch to the LIFO retail method for the period beginning 1/1/05.


Instructions
Prepare a schedule showing the computation of the 12/31/05 inventory under the LIFO retail method adjusted for price level changes (i.e., dollar-value LIFO Retail.) Without prejudice to your answer in requirement A above, assume that the 12/31/04 inventory computed under the LIFO Retail method was $50,000 and $33,500 at retail and cost, respectively, for purposes of this requirement. Data for 2005 follows:
Cost Retail
Purchases (net) $375,000 $495,000
Sales (net) 460,000
Markups (net) 20,000
Markdowns (net) 15,000
2004 Price Index 100
2005 Price Index 120

Thank you for help

Customer: replied 6 years ago.
Relist: Other
Do not need answer any more
Expert:  Manal Elkhoshkhany replied 6 years ago.

I do not know how I missed your reply to my first message.

 

Please forgive me for that and I hope I can help with future posts

 

All the best

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