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Dollar-value LIFO retail

E-9-19 Dollar-value LIFO retail

On January 1, 2011, the Brunswick Hat Company adopted the dollar-value LIFO retail method.  The following data are available for 2011:

 

Cost                               Retail

Beginning inventory                                          $     71,280                  $ 132,000

Net purchases                                                          112.500                     255,000

Net markups                                                                                                     6,000

Net markdowns                                                                                              11,000

Net sales                                                                                                        232,000

Retail price index, 12/31/11                                                                             1.04

Required:

Calculate the estimated ending inventory and cost of goods sold for 2011

E 9-21 Dollar value LIFO retail      

Lance-Hefner Specialty Shoppes decided to use the dollar-value LIFO retail method to value its inventory.    Accounting records provide the following information:

Cost                         Retail

Merchandise inventory, January 1, 2011                  $ 160,000             $ 250,000

Net purchases                                                                    350,200                510,000

Net markups                                                                                                         7,000

Net markdowns                                                                                                   2,000

Net Sales                                                                                                           380,000

Pertinent retail price indexes are as follows:

January 1, 2011                             1.00

December 31, 2011                   1.10

Required:    

Determine ending inventory and cost of goods sold.

 

P 9-1 Lower of cost or market  

Decker Company has five products in its inventory.  Information about the De3cember 31, 2011, inventory as follows:

Product                Quantity              Unit Cost                    Unit replacement      Unit Selling

                                                                                                       Cost                          Price                                           

A                           1,000                   $ 10                                  $ 12                         $ 16

B                              800                   15                                     11                             18

C                              600                         3                                        2                               8

D                              200                         7                                       4                               6

E                              600                       14                                     12                             13

The selling cost for each product consists of a 15 percent sales commission.  The normal profit percentage for each product is 40 percent of the selling price.

Required:

  1. Determine the balance sheet inventory carrying value at December 31, 2011, assuming the LCM rule is applied to individual products.

 

  1. Determine the balance sheet inventory carrying value at December 31, 2011, assuming the LCM rule is applied to the entire inventory.  Also assuming that Decker recognizes an inventory write-down as a separate income statement item, determine the amount of the loss.
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Category: Sample Questions