A. Under your guidance, as of January 1, 2012, the Little Corner Sporting Goods Store installed the retail method of accounting for its merchandise inventory.
When you undertook the preparation of the store's financial statements at June 30, 2012, the following data were available:
|
At Cost
|
At Retail
|
|
Inventory, January 1
|
$26,900
|
$40,000
|
|
Net Markdowns
|
|
4,000
|
|
Net Markups
|
|
15,000
|
|
Net Purchases
|
84,700
|
110,000
|
|
Net Sales
|
|
116,000
|
REQUIRED:
Prepare a schedule to compute the June 30, 2012 inventory under the dollar-value LIFO method, assuming a general price level increase from 100 at January 1, 2012 to 105 at June 30, 2012.
B. The Doll Company estimates the cost of its physical inventory at March 31, 2012 for use in an interim financial statement. The rate of markup on sales is 20%. The following account balances are available:
|
Inventory March 1, 2012
|
$160,000
|
|
Purchases during March
|
86,000
|
|
Purchase returns
|
4,000
|
|
Sales during March
|
140,000
|
REQUIRED
Estimate the cost of inventory at March 31.