Question: Landmark Book Store uses the conventional retail method. Instructions Given the following data, prepare a neat, labeled schedule showing the computation of the cost of
Landmark Book Store uses the conventional retail method.
Instructions
Given the following data, prepare a neat, labeled schedule showing the computation of the cost of inventory on hand at 12/31/17.
| Cost | Retail | |
| Inventory 1/1/17 | $28,900 | $40,000 |
| Purchases | 366,600 | 610,000 |
| Purchases Returns | 9,000 | 20,000 |
| Purchase Discounts | 7,000 | |
| Sales (Gross) | 595,000 | |
| Sales Returns | 15,000 | |
| Employee Discounts | 5,0000 | |
| Freight-in | 23,500 | |
| Freight-out | 50,000 | |
| Loss from Breakage | 2,500 | |
| Markups | 38,000 | |
| Markup Cancellations | 18,000 | |
| Markdowns | 13,500 | |
| Markdown Cancellations | 8,500 |
Landmark Book Store has decided to switch to the LIFO retail method for the period beginning 1/1/18.
Instructions
Prepare a schedule showing the computation of the 12/31/18 inventory under the LIFO retail method adjusted for price level changes (i.e., dollar-value LIFO Retail.) Without prejudice to your answer in requirement A above, assume that the 12/31/17 inventory computed under the LIFO Retail method was $50,000 and $34,500 at retail and cost, respectively, for purposes of this requirement. Data for 2018 follows:
| Cost | Retail | |
| Purchases (net) | $360,000 | $485,000 |
| Sales (net) | 410,000 | |
| Markups (net) | 30,000 | |
| Markdowns (net) | 15,000 | |
| 2017 Price Index | 100 | |
| 2018 Price Index | 125 |
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