Question

Help Save w SmithKline Company maintains inventory records at selling prices as well as at cost For 2018, the records indicate the following data Beginning inventory $ 845120 632 . Freight in on purchases Required: Assuming the price level increased from 1 at January 1 to 165 at December 31, 2018, use the dollar value LIFO retail method to approximate cost of ending inventory and cost of goods sold (Do not round Intermediate calculations. Round final answers to the nearest whole dollar. Enter your answers in thousands.) in 000) Estimated ending inventory at retail Estimated ending inventory at cost Eimated cost of goods sold < Prex 7 of 10 Dext >

Answer 1

Answers

Ending Inventory at Retail	$270
Ending Inventory at Cost	$127
Cost of Goods Sold	$617

--Working

	Cost	Retail	Cost to retail %
Beginning Inventory	$84	$120	70.000%
Net Purchases Less returns	$660	$1,104
Net Mark ups	$0	$3
Net Mark downs		($7)
Purchases	$660	$1,100	60.000%
Goods available for sale	$744	$1,220
Net Sales		($950)
Ending Inventory at Retail		$270
Ending Inventory at Cost	($127)
Cost of Goods Sold	$617

	Step 1	Step 2	Step 3
Ending Inventory at Year end retail prices	Ending Inventory at Year end BASE YEAR retail prices	Inventory Layer at base year retail prices	Inventory Layers converted to cost
$270	$164	$120	$84	[120 x 70% x 1.0]
	[ 270 / 1.65 ]	$44	$43	[$44 x 60% x 1.65]
Total ending Inventory at dollar value LIFO retail cost			$127