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1. Conventional and Dollar-Value LIFO Retail As of January 1, 2010, Aristotle Inc. installed the retail method of accounting for its merchandise inventory. To prepare the store's financial statements at June 30, 2010, you obtain the following data.
(a) Prepare a schedule to compute Aristotle's June 30, 2010, inventory under the conventional retail method of accounting for inventories.
(b) Without prejudice to your solution to part (a), assume that you computed the June 30, 2010, inventory to be $59,400 at retail and the ratio of cost to retail to be 70%. The general price level has increased from 100 at January 1, 2010, to 108 at June 30, 2010. Prepare a schedule to compute the June 30, 2010, inventory at the June 30 price level under the dollar-value LIFO retail method.(AICPA adapted)
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