Compute the inventory on June 30 using the “normal” retail inventory method (lower of average cost…

Retail Inventory Method – The Weber Corporation uses the retail inventory method to estimate its inventory balances. The following information is available on June 30:

Cost

Retail

Cost

Retail

Inventory, January 1

$25,000

$60,000

Markdowns

$7,000

Purchases

75,000

180,000

Additional markups

3,000

Sales

210,000

Markdown cancellations

2,000

Purchases returns

2,000

5,000

Markup cancellations

1,000

Sales returns

5,000

Required

1. Compute the inventory on June 30 using the “normal” retail inventory method (lower of average cost or market).

2. Independent of Requirement 1, assume that the June 30 inventory was $80,000 at retail and that the cost-to-retail ratio is 50%. If the price level of the inventory has risen by 5% during the period, compute the cost of the June 30 inventory under the dollar-value retail LIFO method, assuming that the company adopted the method at the beginning of the year.

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