Dean Company uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to the inventory at July 31 follow. For Six-Months Ended July 31 Beginning inventory, January 31 Purchases Markups, net Sales Markdowns, net Cost Retail $540,000 $750,000 3,060,000 4,725,000 525,000 Required Estimate inventory at July 31 using the LIFO retail method. First, compute current year-end inventory at retail prices: • Note: Do not use negatives signs with your answers. Total goods available for sale at retail $ Less: Net sales Estimated ending inventory at retail $ Next, compute the cost ratios: 5,175,000 375,000 Cost Ratio Numerator Denominator Beginning Inventory Current Year Current Year Inventory at Year-End Retail Prices Lastly, estimate inventory at July 31 using the LIFO retail method by completing the following table. •Note: Use the result EXACTLY as displayed above in the calculations below. Inventory Layers at Retail Prices Layers at Retail Prices Result Beginning Inventory $ Current Year Cost Ratio $ Current Year Ending Inventory at LIFO Cost 0

Dean Company uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to the inventory at July 31 follow. For Six-Months Ended July 31 Beginning inventory, January 31 Purchases Markups, net Sales Markdowns, net Cost Retail $540,000 $750,000 3,060,000 4,725,000 525,000 Required Estimate inventory at July 31 using the LIFO retail method. First, compute current year-end inventory at retail prices: • Note: Do not use negatives signs with your answers. Total goods available for sale at retail $ Less: Net sales Estimated ending inventory at retail $ Next, compute the cost ratios: 5,175,000 375,000 Cost Ratio Numerator Denominator Beginning Inventory Current Year Current Year Inventory at Year-End Retail Prices Lastly, estimate inventory at July 31 using the LIFO retail method by completing the following table. •Note: Use the result EXACTLY as displayed above in the calculations below. Inventory Layers at Retail Prices Layers at Retail Prices Result Beginning Inventory $ Current Year Cost Ratio $ Current Year Ending Inventory at LIFO Cost 0

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Description: do not give solution in image format Estimating Inventory Using LIFO Retail MethodDean Company uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to theinventory at July 31 follow.For Six-Months E

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4PB: The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are...

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