Assignment Problem: As of January 1, 2017, Whispering Inc. adopted the retail method of accounting for its merchandise inventory.
To prepare the store's financial statements at June 30, 2017, you obtain the following data.
|
|
Cost
|
Selling Price
|
|
Inventory, January 1
|
$31,800
|
$46,800
|
|
Markdowns
|
|
10,500
|
|
Markups
|
|
8,300
|
|
Markdown cancellations
|
|
5,800
|
|
Markup cancellations
|
|
3,100
|
|
Purchases
|
115,075
|
154,400
|
|
Sales revenue
|
|
151,500
|
|
Purchase returns
|
3,100
|
3,900
|
|
Sales returns and allowances
|
|
8,400
|
Compute Whispering's June 30, 2017, inventory under the conventional retail method of accounting for inventories.
Without prejudice to your solution to part (a), assume that you computed the June 30, 2017, inventory to be $60,480 at retail and the ratio of cost to retail to be 67.95%. The general price level has increased from 100 at January 1, 2017, to 108 at June 30, 2017. Compute the June 30, 2017, inventory at the June 30 price level under the dollar-value LIFO retail method.
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