Question

Late in 2017, Joan Seceda and four other investors took the chain of Marin Department Stores private, and the company has just completed its third year of operations under the ownership of the investment group. Andrea Selig, controller of Marin Department Stores, is in the process of preparing the year-end financial statements. Based on the preliminary financial statements, Seceda has expressed concern over inventory shortages, and she has asked Selig to determine whether an abnormal amount of theft and breakage has occurred. The accounting records of Marin Department Stores contain the following amounts on November 30, 2020, the end of the fiscal year. Cost Retail Beginning inventory $67,700 $98,600 Purchases 275,120 402,300 Net markups 49,800 Net markdowns 108,200 Sales revenue 326,300 According to the November 30, 2020, physical inventory, the actual inventory at retail is $111,700. (b) x Your answer is incorrect. Assuming that prices have been stable, calculate the value, at cost, of Marin Department Stores'ending inventory using the last-in, first-out (LIFO) retail method. (Round ratios for computational purposes to 0 decimal places, eg. 78% and final answer to 0 decimal places, eg. 28,987.) Estimated ending inventory at Cost $ 82217

Answer 1

	Cost price	Retail price
Purchases	$275,120	$402,300
Net markups		$49,800
Net markdowns		($108,200)
Totals	$275,120	$343,900

Cost to retail ratio = $275,120 / $343,900 = 80%

Retail price total	$343,900
Beginning inventory	$98,600
Total goods at retail	$442,500
Sales	($326,300)
Ending inventory at retail	$116,200
LIFO layer added	$17,600

Ending inventory at cost = Beginning inventory at cost + LIFO layer at cost

= $67,700 + ($17,600*80%)

= $81,780