(Retail Inventory Method—Conventional and LIFO) Robinson Company began operations late in 2012 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2012 and no markdowns during 2012, the ending inventory for 2012 was $14,000 under both the conventional retail method and the LIFO retail method. At the end of 2013, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2013. The following data are available for computations.
|
|
Cost |
Retail |
|
Inventory, January 1, 2013 |
$14,000 |
$20,000 |
|
Sales |
|
75,000 |
|
Net markups |
|
9,000 |
|
Net markdowns |
|
2,500 |
|
Purchases |
55,500 |
81,000 |
|
Freight in |
7,500 |
|
|
Estimated theft |
|
2,000 |
Instructions
Compute the cost of the 2013 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.