Homework SourseOn January 1 2018 the Brunswick Hat Company adopted the doll
On January 1, 2018, the Brunswick Hat Company adopted the dollar-value LIFO retail method. The following data are available for 2018: Cost Retail Beginning inventory $ 72,900 $ 135,000 Net purchases 102,150 232,000 Net markups 5,000 Net markdowns 10,000 Net sales 200,000 Retail price index, 12/31/18 1.08
Required: Calculate the estimated ending inventory at retail and ending inventory at cost and cost of goods sold for 2018.
Solution
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| Cost | Retail | |
| Beginning inventory | $ 72,900 | $ 135,000 |
| Plus: Net Purchases | $ 102,150 | $ 232,000 |
| Net Markup | $ 5,000 | |
| Less: Mark Down | $ (10,000) | |
| Goods Available For Sale (Excluding Beginning Inventory) | $ 102,150 | $ 227,000 |
| Goods Available For Sale (Including Beginning Inventory) | $ 175,050 | $ 362,000 |
| Base year cost-to retail % (72900/135000) | 54% | |
| 2011 cost-to retail %(102150/227000) | 45% | |
| Less Net Sales | $ (200,000) | |
| Estimated Ending Inventory at current year retail Prices | $ 162,000 | |
| Estimated Ending Inventory at Cost | $ 79,650 | |
| Estimated Cost of Goods Sold | $ 95,400 |
