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:

Financial Effect

The impact of financial transactions and events on the financial statements of an organization, altering its financial condition or performance.

Uncertainties

Situations or elements with unpredictable outcomes, often affecting decision-making and planning in business and science.

Expected Outflows

The projected cash or resource outflows from a business or specific project, often used in financial planning or investment analysis.

Provisions Disclosure

The requirement to reveal information about provisions within the financial statements, including the nature, timing, and amount.