Murdock Industries Uses a Periodic Inventory System and the LIFO

question 71

Essay

Murdock Industries uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following data has been summarized for December 31, 2009:
Required:
Estimate the LIFO cost of ending inventory. Assume stable retail prices during the period.
$$\begin{array} { l c r } & \text { Cost } & { \text { Retail } } \\\text { Inventory, January 1 } & \$ 116,000 & \$ 165,000 \\\text { Purchases } & 355,000 & 540,000 \\\text { Net markups } & & 15,600 \\\text { Net markdowns } & & 9,800 \\\text { Net sales } & & 522,000\end{array}$$

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service supplied is equal to the quantity demanded.

Food Stamps

Government-issued vouchers used to purchase groceries by individuals and families in need, part of a social assistance program.

Supply And Demand Analysis

An economic model used to understand the pricing and quantity of goods in a market by examining how the availability of a product (supply) and the desire for it (demand) interact.

Demand Curve

The demand curve is a graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers within a given period.