Retail Inventory Method
EKC Company uses the retail inventory method. The following information for 2016 is available:
| |
Cost |
Retail |
|
|
Cost |
Retail |
| Inventory, January 1 |
$100,000 |
$180,000 |
|
Markup cancellations |
- |
$ 12,000 |
| Purchases (gross price) |
320,000 |
600,000 |
|
Markdowns |
- |
15,000 |
| Purchases discounts taken |
6,000 |
- |
|
Markdown cancellations |
- |
4,000 |
| Freight-in |
16,000 |
- |
|
Net Sales |
- |
580,000 |
| Additional markups |
- |
60,000 |
|
|
|
|
1. Compute the cost of the ending inventory under the FIFO method. Round the cost-to-retail ratio to three decimal places and the final answers to the nearest dollar.
2. Compute the cost of the ending inventory under the average cost method. Round the cost-to-retail ratio to three decimal places and the final answers to the nearest dollar.
3. Compute the cost of the ending inventory under the LIFO method. Round the cost-to-retail ratio to three decimal places and the final answers to the nearest dollar
4. Compute the cost of the ending inventory under the lower of cost or market method (based on average cost). Round the cost-to-retail ratio to three decimal places and the final answers to the nearest dollar.