Compute the conventional retail method

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Question

Sheridan Company began operations late in 2019 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2019 and no markdowns during 2019, the ending inventory for 2019 was $13,347 under both the conventional retail method and the LIFO retail method.

At the end of 2020, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2020. The following data are available for computations.

Cost Retail

Inventory, January 1, 2020 $13,347 $20,500

Sales revenue 75,000

Net markups 8,300

Net markdowns 1,500

Purchases 54,200 76,300

Freight-in 8,125

Estimated theft 2,100

(a) The conventional retail method.

(b)The LIFO retail method.

Reference no: EM132409093

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