Retail Inventory Method – The Weber Corporation uses the retail inventory method to estimate its inventory balances. The following information is available on June 30:
Inventory, January 1
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.