Guinea, Inc. adopted the dollar-value LIFO retail inventory method on January 1, 2016, when the price index was 100. The following information was taken from company records on December 31, 2016, when the price index was 110.
Cost
Retail
Sales $190,000
Additional markups 18,000
Markup cancellations 6,000
Markdowns 8,000
Markdown cancellations 2,000
Inventory, January 1$ 14,400
20,000
Purchases158,000
199,000
Purchase returns4,000
5,000
?
Required:Compute the cost of the December 31, 2016, inventory. (Round off calculations to the nearest dollar.)
What will be an ideal response?
Cost of inventory = $20,560, determined as follows:?Cost percentages:?
| Beginning inventory: | $14,400/$20,000 = 0.72 |
| Purchases: | ($158,000 ? $4,000)/($199,000 ? $5,000 + $18,000 ? $6,000 ? $8,000 + $2,000) = 0.77 |
| Ending inventory at retail: | $20,000 + $199,000 ? $5,000 ? $190,000 + $18,000 ? $6,000 ? $8,000 + $2,000 = $30,000 |
| Ending inventory at retail at base year prices: | 30,000/1.10 = 27,273 |
| Inventory change at retail at base year prices: | 27,273 ? 20,000 = 7,273 |
| Inventory change at retail at relevant current prices: | 7,273 × 1.10 = 8,000 |
| Inventory change at current costs: | 8,000 × 0.77 = 6,160 |
| Layers |
| Cost |
| $14,400 |
| 6,160 |
| $20,560 |
You might also like to view...
The holder of a note adjusts for accrued interest by debiting Interest Receivable and crediting Interest Income
Indicate whether the statement is true or false
Meow Products Ltd. Meow Products Ltd. produces and sells scratching posts for cats. In the current year, the company had expected to sell 12,000 posts but actually produced and sold 10,000 posts. The following information is available regarding the standard cost to produce a single post: Direct materials: 3 feet @ 1.75 per foot Direct labor: 15 minutes @ $.30 per minute In the current year,
38,000 feet of material were purchased out of which 35,000 feet were used at a cost of $1.55 per foot, and 160,000 direct labor minutes were incurred at a cost of $.32 per minute. Refer to the Meow Products Ltd. information above. The company's direct materials usage variance for the current year is: A) $14,000 F. B) $ 1,750 F. C) $ 3,500 U. D) $ 8,750 U.
Describe series interviews
Dissension within the group tends not to lower group performance when
A) the dissenters play the devil's advocate. B) the rest of the group quickly votes on the best alternative. C) the team leader instructs the dissenters to be quiet. D) the dissenters want to work collaboratively despite their disagreement.