Reference no: EM132460574

Instructions

Given the following data, prepare a neat, labeled schedule showing the computation of the cost of inventory on hand at 12/31/17.

	Cost	Retail
Inventory 1/1/17	$28.900	$40,000
Purchases	366.600	610,000
Purchases Returns	9,000	20,000
Purchase Discounts	7,000
Sales (Gross)		595,000
Sales Returns		15,000
Employee Discounts		5.0000
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

Landmark Book Store has decided to switch to the LIFO retail method

Instructions

Question 1: Prepare a schedule showing the computation of the 12/31/18 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 12/31/17 inventory computed under the LIFO Retail method was $50,000 and $34,500 at retail and cost, respectively, for purposes of this requirement. Data for 2018 follows:

	Cost	Retail
Purchases (net)	$360,000	$485,000
Sales (net)		410,000
Markups (net)		30,000
Markdowns (net)		15,000
2017 Price Index	100
2018 Price Index	125