Question

Bosco Company adopted the dollar-value LIFO retail method at the beginning of 2021. Information for 2021 and 2022 is as follows, with certain data intentionally omitted: Required: Determine the missing data. (Round "Cost-to-Retail Percentage" to the nearest whole percent (i.e., 0.1234 should be entered as 12%).) Inventory Retail Price Index 1.00 1.06 Cost 21,000 $ 29,480 66,330 Cost-to-Retail Percentage 70 80 Date Inventory, 1/1/2021 Inventory, 12/31/2021 2022 net purchases 2022 net sales Inventory, 12/31/2022 % % Retail 30.000 42,400 99,000 90,800 50,600 1.10

Answer 1

The LIFO method is used to calculate the precent of retail and Current cost to retail % is 67 percent.

Explanation:

Ending inventory at retail as on 12/31/2022 converted to cost = 50600 by1.1 = 46000

Inventory as on 12/31/2021 converted to cost = 42400 by 1.06 = 40000

Inventory added during 2021 = 40,000 minus 30,000 = 10,000

Inventory added during 2022 = 46000  minus 40000= 6000

Inventory layers at base year retail prices:

Beginning inventory = 30000 into 1 into 70% = 21000

Layers added during 2021 = 10000 into 1.06 into 80% = 8480

Layers added during 2022 =6000 into 1.1 into 67% = 4422

Inventory as on 31/12/2022 at cost = 21000 plus 8480 plus 4422 = 33902

Therefore, Current cost to retail % = 66330 by 99000 = 67%