Question

The records of Lohse Stores included the following data: Inventory, May 1, at retail, $14,500; at cost, $10,440 Purchases during May, at retail, $42,900; at cost, $31,550 Freight-in, $2,000; purchase discounts, $250 Additional markups, $3,800; markup cancellations, $400; net markdowns, $1,300 Sales during May, $45,500 Calculate the estimated inventory at May 31 on a LIFO basis.

Answer 1

Answer:

$9,3

Explanation:

                             COST    RETAIL    RATIO

Inventory, May 1 $10,440        $14,500 .72

Purchases           31,550            42,900

Freight-in          2,000

Purchase discounts

                          (250)

Net markups                                  3,400

Net markdowns                           (1,300)

Totals excluding beginning inventory

                        33,300                45,000   .74

Goods available $43,740          59,500

Sales                                          (46,500)

Inventory, May 31                         $13,000

Estimated inventory, May 31

($13,000 × .72) $ 9,360