Raleigh Department Store converted from the conventional retail method to the LIFO retail method on January 1, 2014, and is now considering converting to the dollar-value LIFO retail inventory method. Management requested, during your examination of the financial statements for the year ended December 31, 2016, that you furnish a summary showing certain computations of inventory costs for the past three years. Available information follows:
a. The inventory at January 1, 2014, had a retail value of $29,000 and a cost of $21,000 based on the conventional retail method.
b. Transactions during 2014 were as follows:
|
Cost |
Retail |
| Gross purchases |
$ |
342,000 |
|
$ |
582,500 |
|
| Purchase returns |
|
4,500 |
|
|
6,000 |
|
| Purchase discounts |
|
5,000 |
|
|
|
|
| Gross sales |
|
|
|
|
582,500 |
|
| Sales returns |
|
|
|
|
5,000 |
|
| Employee discounts |
|
|
|
|
3,000 |
|
| Freight-in |
|
20,000 |
|
|
|
|
| Net markups |
|
|
|
|
17,000 |
|
| Net markdowns |
|
|
|
|
6,000 |
Sales to employees are recorded net of discounts.
c. The retail value of the December 31, 2015, inventory was $40,040, the cost-to-retail percentage for 2015 under the LIFO retail method was 71%, and the appropriate price index was 104% of the January 1, 2015, price level.
d. The retail value of the December 31, 2016, inventory was $37,450, the cost-to-retail percentage for 2016 under the LIFO retail method was 70%, and the appropriate price index was 107% of the January 1, 2015, price level.
1. Calculate the cost of inventory for December 31, 2015 and 2016, based on the dollar-value LIFO retail method.
I need help figuring out total ending inventory at dollar value LIFO retail cost, 2015.