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Indigo Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years. Here is the available information. 1. The inventory at January 1, 2019, had a retail value of $56,300 and cost of $30,300 based on the conventional retail method. Transactions during 2019 were as follows. 2. Purchases Purchase returns Purchase discounts Gross sales revenue (after employee discounts) Sales returns Employee discounts Freight-in Net markups Net markdowns 3. 4. Cost $320,434 5,300 6,100 Inventories under the dollar-value LIFO method $ 17,600 Retail $560,400 10,200 541,500 9,200 2,900 The retail value of the December 31, 2020, inventory was $74,600, the cost ratio for 2020 under the LIFO retail method was 62%, and the regional price index was 105% of the January 1, 2020, price level. 2020 19,700 11,700 The retail value of the December 31, 2021, inventory was $63,200, the cost ratio for 2021 under the LIFO retail method was 61%, and the regional price index was 108% of the January 1, 2020, price level. Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,500) under the LIFO retail method at a cost of $34,183. Compute the cost of the store's 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to O decimal places, e.g. 28,987.) $ 2021

Indigo Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years. Here is the available information. 1. The inventory at January 1, 2019, had a retail value of $56,300 and cost of $30,300 based on the conventional retail method. Transactions during 2019 were as follows. 2. Purchases Purchase returns Purchase discounts Gross sales revenue (after employee discounts) Sales returns Employee discounts Freight-in Net markups Net markdowns 3. 4. Cost $320,434 5,300 6,100 Inventories under the dollar-value LIFO method $ 17,600 Retail $560,400 10,200 541,500 9,200 2,900 The retail value of the December 31, 2020, inventory was $74,600, the cost ratio for 2020 under the LIFO retail method was 62%, and the regional price index was 105% of the January 1, 2020, price level. 2020 19,700 11,700 The retail value of the December 31, 2021, inventory was $63,200, the cost ratio for 2021 under the LIFO retail method was 61%, and the regional price index was 108% of the January 1, 2020, price level. Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,500) under the LIFO retail method at a cost of $34,183. Compute the cost of the store's 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to O decimal places, e.g. 28,987.) $ 2021

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Accounting For Merchandising Businesses
Section: Chapter Questions
Problem 9PB: On June 30, 2019, the balances of the accounts appearing in the ledger of Simkins Company are as...
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Indigo Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years. Here is the available information. The inventory at January 1, 2019, had a retail value of $56,300 and cost of $30,300 based on the conventional retail method. 2. Transactions during 2019 were as follows. 1. Purchases Purchase returns Purchase discounts Gross sales revenue (after employee discounts) Sales returns Employee discounts Freight-in Net markups Net markdowns 3. 4. Cost $320,434 5,300 6,100 Inventories under the dollar-value LIFO method $ eTextbook and Media 17,600 Save for Later Retail $560,400 10,200 541,500 9,200 The retail value of the December 31, 2020, inventory was $74,600, the cost ratio for 2020 under the LIFO retail method was 62%, and the regional price index was 105% of the January 1, 2020, price level. 2,900 The retail value of the December 31, 2021, inventory was $63,200, the cost ratio for 2021 under the LIFO retail method was 61%, and the regional price index was 108% of the January 1, 2020, price level. 19,700 Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,500) under the LIFO retail method at a cost of $34,183. Compute the cost of the store's 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to O decimal places, e.g. 28,987.) 2020 11,700 $ 2021 Attempts: 0 of 3 used Submit Answer I
Transcribed Image Text:Indigo Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2020, and is now considering converting to the dollar-value LIFO inventory method. During your examination of the financial statements for the year ended December 31, 2021, management requested that you furnish a summary showing certain computations of inventory cost for the past 3 years. Here is the available information. The inventory at January 1, 2019, had a retail value of $56,300 and cost of $30,300 based on the conventional retail method. 2. Transactions during 2019 were as follows. 1. Purchases Purchase returns Purchase discounts Gross sales revenue (after employee discounts) Sales returns Employee discounts Freight-in Net markups Net markdowns 3. 4. Cost $320,434 5,300 6,100 Inventories under the dollar-value LIFO method $ eTextbook and Media 17,600 Save for Later Retail $560,400 10,200 541,500 9,200 The retail value of the December 31, 2020, inventory was $74,600, the cost ratio for 2020 under the LIFO retail method was 62%, and the regional price index was 105% of the January 1, 2020, price level. 2,900 The retail value of the December 31, 2021, inventory was $63,200, the cost ratio for 2021 under the LIFO retail method was 61%, and the regional price index was 108% of the January 1, 2020, price level. 19,700 Without prejudice to your solution to part (b), assume that you computed the December 31, 2019, inventory (retail value $60,500) under the LIFO retail method at a cost of $34,183. Compute the cost of the store's 2020 and 2021 year-end inventories under the dollar-value LIFO method. (Round ratios for computational purposes to 2 decimal places, e.g. 78.72% and final answer to O decimal places, e.g. 28,987.) 2020 11,700 $ 2021 Attempts: 0 of 3 used Submit Answer I
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