Keller Company began operations on January 1, 2024, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2024 and, because there was no beginning inventory, its ending inventory for 2024 of $38,100 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2025, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2025, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level.

Instructions

Determine the cost of the 2025 ending inventory under both 

(a) The conventional retail method 

(b) The LIFO retail method.

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Inventory, Jan. 1, 2025 Markdowns (net) Markups (net) Purchases (net) Sales (net) Cost $ 38,100 130,900 Retail $ 60,000 13,000 22,000 178,000 167,000