Landmark Book Store uses the conventional retail method

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 12/31/10.

Cost Retail
Inventory 1/1/10 $ 28,900 $ 40,000
Purchases 353,600 610,000
Purchases Returns 9,000 20,000
Purchase Discounts 7,000
Sales (Gross) 615,000
Sales Returns 20,000
Employee Discounts 5,000
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

B. Landmark Book Store has decided to switch to the LIFO retail method for the period beginning 1/1/11.

Instructions
Prepare a schedule showing the computation of the 12/31/11 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 12/31/10 inventory computed under the LIFO Retail method was $40,000 and $27,500 at retail and cost, respectively, for purposes of this requirement. Data for 2011 follows:
Cost Retail
Purchases (net) $375,000 $485,000
Sales (net) 420,000
Markups (net) 30,000
Markdowns (net) 15,000
2010 Price Index 100
2011 Price Index 120


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Brewster Company began operations on January 1, 2010, adopting the conventional retail inventory system

E9-22 (Retail Inventory Method—Conventional and LIFO) Brewster Company began operations on January 1, 2010, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2010 and, because there was no beginning inventory, its ending inventory for 2010 of $41,100 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2011, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2011, 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.

Cost Retail
Inventory, Jan. 1, 2011 $ 41,100 $ 60,000
Markdowns (net) 13,000
Markups (net) 22,000
Purchases (net) 150,000 191,000
Sales (net) 167,000

Instructions
Determine the cost of the 2011 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.

Click here for the solution: Brewster Company began operations on January 1, 2010, adopting the conventional retail inventory system