Calculate the final inventory value for Spartan Corp based on individual inventory items
using the lower-of-cost-or-market method.
Record the journal entry to write-down inventory assuming the write-down is common
for the inventory.
Presented below is information related to Spartan Company (10 pts total).
Cost Retail
Beginning inventory $ 250,000 $ 300,000
Purchases 1,450,000 2,250,000
Markups 95,000
Markup cancellations 25,000
Markdowns 25,000
Markdown cancellations 15,000
Sales revenue 2,300,000
Compute the ending inventory by the conventional retail inventory method (5 pts).
Compute the ending inventory by the cost retail inventory method (5 pts)
Presented below is information related to Cougar Company (9 pts total).
Cougar Company manufactures one product and uses dollar-value LIFO to determine its ending
inventory. The company reported $940,000 inventory On December 31, 2019. Inventory data are
as follows:
Inventory at Price index
Year year-end prices (base year 2019)
2020 $1,248,000 1.04
2021 1,680,000 1.05
2022 1,748,000 1.15
Compute the inventory at December 31, 2020 and 2021 using the dollar-value LIFO
method for each year.
