Retail Inventory Method

Weber Corporation uses the retail inventory method to estimate its inventory balances. The following information is available on June 30:

	Cost	Retail			Cost	Retail
Inventory, January 1	$25,000	$ 60,000		Markdowns		$7,000
Purchases	75,000	180,000		Additional markups		3,000
Sales		205,000		Markdown cancellations		2,000
Purchases returns	2,000	5,000		Markup cancellations		1,000

Required:

1. Compute the inventory on June 30 using the conventional retail inventory method (lower of average cost or market). Round the cost-to-retail ratio to three decimal places.

WEBER CORPORATION
Computation of Estimated Inventory Using Conventional Retail Inventory Method
June 30
	Cost	Retail
	$	$
	$	$
Ending inventory at retail		$
Ending inventory at cost	$

2. Independent of Requirement 1, assume that the June 30 inventory was $80,000 at retail and that the cost-to-retail ratio is 50%. If the price level of the inventory has risen by 5% during the period, compute the cost of the June 30 inventory under the dollar-value retail LIFO method, assuming that the company adopted the method at the beginning of the year. If required, round to the nearest dollar. $