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Question(s) / Instruction(s):

*Pr. 9-113—LIFO retail inventory method, fluctuating prices.
Cabel Department Store wishes to use the retail LIFO method of valuing inventories for 2007. The appropriate data are as follows:

December 31, 2006 inventory (base layer)

$1,150,000

$2,100,000

Purchases (net of returns, allowances, markups, and markdowns)

2,100,000

3,500,000

Sales

 

2,870,000

Price index for 2007

 

105

Instructions

Complete the following schedule (fill in all blanks and show calculations in the parentheses):

Computation of Retail Inventory for 2007

Cost

 

Retail

 

Ratio

 

Inventory, December 31, 2006

 

$1,150,000

 

$2,100,000

Purchases (net of returns, allowances,

 

markups, and markdowns)

 

 

 

 

 

%

Total available

$

 

 

 


 

 

 

 

Inventory, December 31, 2007, at retail

 

 

$

 

Adjustment of Inventory to LIFO Basis

Cost

 

Retail

 

Ending inventory at base year prices

 

 

$

 

 

(

)

Beginning inventory at base year prices

$

 

 

 

Increase at base year prices

 

 

$

 

Increase at 2007 retail

(

)

 

 

$

 

Increase at 2007 cost

(

)

 

 

Inventory, December 31, 2007, at LIFO cost

$

 

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