Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: The inventory at January 1, 2019, had a retail value of $50,000 and a cost of $36,200 based on the conventional retail method.
Transactions during 2019 were as follows:
Cost Retail
Gross purchases $333,900 $540,000
Purchase returns 6,400 15,000
Purchase discounts 5,500
Gross sales 500,000
Sales returns 8,000
Employee discounts 5,500
Freight-in 29,000
Net markups 30,000
Net markdowns 15,000
Sales to employees are recorded net of discounts.
The retail value of the December 31, 2020, inventory was $104,325, the cost-to-retail percentage for 2020 under the LIFO retail method was 70%, and the appropriate price index was 107% of the January 1, 2020, price level.
The retail value of the December 31, 2021, inventory was $53,350, the cost-to-retail percentage for 2021 under the LIFO retail method was 69%, and the appropriate price index was 110% of the January 1, 2020, price level.
Required:
Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.