Blue Company began operations on January 1, 2019, adopting theconventional retail inventory system. None of the company’smerchandise was marked down in 2019 and, because there was nobeginning inventory, its ending inventory for 2019 of $38,200 wouldhave been the same under either the conventional retail system orthe LIFO retail system.
On December 31, 2020, the store management considers adopting theLIFO retail system and desires to know how the December 31, 2020,inventory would appear under both systems. All pertinent dataregarding purchases, sales, markups, and markdowns are shown below.There has been no change in the price level.
| | Cost | | Retail |
|---|
Inventory, Jan. 1, 2020 | | $38,200 | | | $59,300 | |
|---|
Markdowns (net) | | | | | 12,900 | |
|---|
Markups (net) | | | | | 22,200 | |
|---|
Purchases (net) | | 129,300 | | | 178,900 | |
|---|
Sales (net) | | | | | 169,700 | |
|---|
Determine the cost of the 2020 ending inventory under both (a) theconventional retail method and (b) the LIFO retail method.
