Discuss retail inventory method to account for inventory

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Reference no: EM131775865

Dock Inc. adopted the dollar-value LIFO inventory method as of January 1, 2015. A single inventory pool and an internally computed price index are used to compute Brock's LIFO inventory layers. Information about Dock's dollar value inventory follows:

Inventory

Date

At base cost

Year cost

At current

Year cost

At dollar

Value LIFO

1/1/2015

$60,000

$ 60,000

$60,000

2015 layer

7,500

21,000

9,000

12/31/2015

67,500

81,000

69,000

2016 layer

22,500

39,000

?

12/31/2016

$90,000

$120,000

?

Required: What is Dock's dollar value LIFO inventory at December 31, 2016?

Crunch Company uses the conventional retail inventory method to account for inventory. The following information related to 2016 operations:

 

Average

 

Cost

Retail

Beginning inventory and purchases

$450,000

$690,000

Net markups

 

30,000

Net markdowns

 

45,000

Sales

 

585,000

Required: What amount should be reported as cost of sales for 2016?

Quince Inc. uses the periodic inventory costing system. The Quince ending merchandise inventory official count at December 31, 2017 totaled $120,000. However, the balance in the merchandise inventory general ledger account at December 31, 2017 was $125,000. What was the amount of the over-or-understatement for cost of goods sold and gross profit for 2017?

Reference no: EM131775865

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