Final answer:
To calculate both the estimated ending inventory and COGS for Brunswick Hat Company using the Dollar-Value LIFO Retail method, you need to adjust the retail inventory for markups, markdowns, and sales, then apply the retail price index to determine the ending inventory at cost and finally subtract it from the cost of goods available for sale to get COGS.
Step-by-step explanation:
The question involves calculating the estimated ending inventory and cost of goods sold (COGS) for Brunswick Hat Company using the Dollar-Value LIFO Retail method.
Steps to calculate estimated ending inventory:
Add net purchases and net markups to the beginning inventory at retail, then subtract net markdowns.
Subtract net sales from the adjusted retail value to determine the ending inventory at retail.
Apply the retail price index to the ending inventory at retail to adjust for inflation and find the estimated ending inventory at the cost.
Steps to calculate COGS:
Subtract the estimated ending inventory at the cost from the cost of goods available for sale.
The calculation starts with computing the cost of goods available for sale which is the sum of the beginning inventory at the cost plus net purchases: $71,280 + $112,500 = $183,780. Then the ending inventory at retail is calculated: ($132,000 + $255,000 + $6,000 - $11,000 - $232,000 = $150,000). Applying the retail price index of 1.04, the ending inventory at cost would be $150,000 / 1.04 = $144,230.77 (rounded to 2 decimal places). Finally, the COGS for Brunswick would be the cost of goods available for sale minus the ending inventory at the cost: $183,780 - $144,230.77 = $39,549.23 (rounded to 2 decimal places).