Question

On January 1, 2021, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $180,000 and $278,250, respectively. Net purchases during the year at cost and at retail were $735,200 and $907000, respectively. Markups during the year were $12,000. There were no markdowns. Net sales for 2021 were $866,500. The retail price index at the end of 2021 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2021 balance sheet? (Do not round intermediate calculations)

a. $252,000
b. $330,750
c. $210,870
d. $264,600

Answer 1

The answer is $330750. the option (b) is correct

Step-by-step explanation:

Solution

Given that:

The Balance sheet for Cold stone report recorded on 12/31/2021:

Cost Retail Ratio

Beginning Inventory $180,000 $278,250

Purchase $735,200 $907000

Net Markups $12,000

Less: Net markdowns $0

The cost of goods available

for sale $915200 $1197250 76%

Less sales $866,500

Ending Inventory $330750

Therefore the inventory balance for Cold stone is $330750