Question

Geese Company utilizes the dollar-value LIFO retail inventory method. Its cost-to-retail percentage is 60% based on beginning inventory and 64% based on current-period purchases. The company determined that beginning inventory at retail was $200,000 and that ending inventory at current-year retail prices was $250,000. The current-year price index is 1.10. Rounding to the nearest dollar, ending inventory at base-year retail prices would be _______.

Answer 1

$227,272

Step-by-step explanation:

Ending inventory at base-year retail prices =

Ending inventory at current-year retail prices

÷The current-year price index

Ending inventory at current-year retail prices $250,000

The current-year price index 1.10

Hence:

$250,000÷1.10

=$227,272