Raleigh Department Store uses the conventional retail method forthe year ended December 31, 2016. Available informationfollows:
- The inventory at January 1, 2016, had a retail value of $37,000and a cost of $30,090 based on the conventional retail method.
- Transactions during 2016 were as follows:
| Cost | Retail |
| Gross purchases | $ | 177,030 | | $ | 410,000 | |
| Purchase returns | | 5,700 | | | 28,000 | |
| Purchase discounts | | 4,200 | | | | |
| Gross sales | | | | | 345,000 | |
| Sales returns | | | | | 5,500 | |
| Employee discounts | | | | | 3,000 | |
| Freight-in | | 29,500 | | | | |
| Net markups | | | | | 17,000 | |
| Net markdowns | | | | | 28,000 | |
|
Sales to employees are recorded net of discounts.
- The retail value of the December 31, 2017, inventory was$68,850, the cost-to-retail percentage for 2017 under the LIFOretail method was 70%, and the appropriate price index was 102% ofthe January 1, 2017, price level.
- The retail value of the December 31, 2018, inventory was$40,950, the cost-to-retail percentage for 2018 under the LIFOretail method was 69%, and the appropriate price index was 105% ofthe January 1, 2017, price level.
Required:
1. Estimate ending inventory for 2016 using theconventional retail method.
2. Estimate ending inventory for 2016 assumingRaleigh Department Store used the LIFO retail method.
3. Assume Raleigh Department Store adopts thedollar-value LIFO retail method on January 1, 2017. Estimatingending inventory for 2017 and 2018.
