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Required information [The following information applies to the questions displayed below.] Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail method. b. Transactions during 2022 were as follows: Cost Gross purchases Purchase returns Purchase discounts Sales Sales returns Employee discounts Freight-in Net markups Net markdowns $ 282,000 Retail $ 490,000 6,500 5,000 10,000 492,000 5,000 3,000 26,500 25,000 10,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2023, inventory was $56,100, the cost-to-retail percentage for 2023 under the LIFO retail method was 62%, and the appropriate price index was 102% of the January 1, 2023, price level. d. The retail value of the December 31, 2024, inventory was $48,300, the cost-to-retail percentage for 2024 under the LIFO retail method was 61%, and the appropriate price index was 105% of the January 1, 2023, price level. Required: 2. Estimate ending inventory for 2022 assuming Raleigh Department Store used the LIFO retail method. Note: Amounts to be deducted should be indicated with a minus sign. Round your cost-to-retail percentage calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and final answers to the nearest whole dollar. Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 27,500 S 45,000 Add: Purchases Add: Freight-in Less: Purchase returns Less: Purchase discounts 282,000 490,000 26,500 0 (6,500) (10,000) (5,000) 0 Add: Net markups 25,000 Less: Net markdowns 0 (10,000) Goods available for sale (excluding beginning inventory) 324,500 x 540,000 Goods available for sale (including beginning inventory) S 324,500 540,000 Cost-to-retail percentage 59.00% Less: Net sales Sales $ 492,000 Sales returns Employee discounts (5,000) 3,000 0 × Estimated ending inventory at retail S 50,000 Estimated ending inventory at cost S 29,500

Required information [The following information applies to the questions displayed below.] Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail method. b. Transactions during 2022 were as follows: Cost Gross purchases Purchase returns Purchase discounts Sales Sales returns Employee discounts Freight-in Net markups Net markdowns $ 282,000 Retail $ 490,000 6,500 5,000 10,000 492,000 5,000 3,000 26,500 25,000 10,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2023, inventory was $56,100, the cost-to-retail percentage for 2023 under the LIFO retail method was 62%, and the appropriate price index was 102% of the January 1, 2023, price level. d. The retail value of the December 31, 2024, inventory was $48,300, the cost-to-retail percentage for 2024 under the LIFO retail method was 61%, and the appropriate price index was 105% of the January 1, 2023, price level. Required: 2. Estimate ending inventory for 2022 assuming Raleigh Department Store used the LIFO retail method. Note: Amounts to be deducted should be indicated with a minus sign. Round your cost-to-retail percentage calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and final answers to the nearest whole dollar. Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 27,500 S 45,000 Add: Purchases Add: Freight-in Less: Purchase returns Less: Purchase discounts 282,000 490,000 26,500 0 (6,500) (10,000) (5,000) 0 Add: Net markups 25,000 Less: Net markdowns 0 (10,000) Goods available for sale (excluding beginning inventory) 324,500 x 540,000 Goods available for sale (including beginning inventory) S 324,500 540,000 Cost-to-retail percentage 59.00% Less: Net sales Sales $ 492,000 Sales returns Employee discounts (5,000) 3,000 0 × Estimated ending inventory at retail S 50,000 Estimated ending inventory at cost S 29,500

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 58E: Analyzing Inventory The recent financial statements of McLelland Clothing Inc. include the following...
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Required information [The following information applies to the questions displayed below.] Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail method. b. Transactions during 2022 were as follows: Cost Gross purchases Purchase returns Purchase discounts Sales Sales returns Employee discounts Freight-in Net markups Net markdowns $ 282,000 Retail $ 490,000 6,500 5,000 10,000 492,000 5,000 3,000 26,500 25,000 10,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2023, inventory was $56,100, the cost-to-retail percentage for 2023 under the LIFO retail method was 62%, and the appropriate price index was 102% of the January 1, 2023, price level. d. The retail value of the December 31, 2024, inventory was $48,300, the cost-to-retail percentage for 2024 under the LIFO retail method was 61%, and the appropriate price index was 105% of the January 1, 2023, price level. Required: 2. Estimate ending inventory for 2022 assuming Raleigh Department Store used the LIFO retail method. Note: Amounts to be deducted should be indicated with a minus sign. Round your cost-to-retail percentage calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and final answers to the nearest whole dollar. Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 27,500 S 45,000 Add: Purchases Add: Freight-in Less: Purchase returns Less: Purchase discounts 282,000 490,000 26,500 0 (6,500) (10,000) (5,000) 0 Add: Net markups 25,000 Less: Net markdowns 0 (10,000) Goods available for sale (excluding beginning inventory) 324,500 x 540,000 Goods available for sale (including beginning inventory) S 324,500 540,000 Cost-to-retail percentage 59.00% Less: Net sales Sales $ 492,000 Sales returns Employee discounts (5,000) 3,000 0 × Estimated ending inventory at retail S 50,000 Estimated ending inventory at cost S 29,500
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Raleigh Department Store uses the conventional retail method for the year ended December 31, 2022. Available information follows: a. The inventory at January 1, 2022, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail method. b. Transactions during 2022 were as follows: Cost Gross purchases Purchase returns Purchase discounts Sales Sales returns Employee discounts Freight-in Net markups Net markdowns $ 282,000 Retail $ 490,000 6,500 5,000 10,000 492,000 5,000 3,000 26,500 25,000 10,000 Sales to employees are recorded net of discounts. c. The retail value of the December 31, 2023, inventory was $56,100, the cost-to-retail percentage for 2023 under the LIFO retail method was 62%, and the appropriate price index was 102% of the January 1, 2023, price level. d. The retail value of the December 31, 2024, inventory was $48,300, the cost-to-retail percentage for 2024 under the LIFO retail method was 61%, and the appropriate price index was 105% of the January 1, 2023, price level. Required: 2. Estimate ending inventory for 2022 assuming Raleigh Department Store used the LIFO retail method. Note: Amounts to be deducted should be indicated with a minus sign. Round your cost-to-retail percentage calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34) and final answers to the nearest whole dollar. Answer is complete but not entirely correct. Cost-to- Cost Retail Retail Ratio Beginning inventory $ 27,500 S 45,000 Add: Purchases Add: Freight-in Less: Purchase returns Less: Purchase discounts 282,000 490,000 26,500 0 (6,500) (10,000) (5,000) 0 Add: Net markups 25,000 Less: Net markdowns 0 (10,000) Goods available for sale (excluding beginning inventory) 324,500 x 540,000 Goods available for sale (including beginning inventory) S 324,500 540,000 Cost-to-retail percentage 59.00% Less: Net sales Sales $ 492,000 Sales returns Employee discounts (5,000) 3,000 0 × Estimated ending inventory at retail S 50,000 Estimated ending inventory at cost S 29,500
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