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Harlequin Co

question 4

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Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2012 (its base year) . Its beginning inventory for 2013 was $36,000 at cost and $72,000 at retail prices. At the end of 2013, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2013 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/13 balance sheet?


Definitions:

Price Volatile

Characterizes a market or commodity whose price is subject to rapid, unexpected, and often large changes.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Supply Curve

A graph showing the relationship between the quantity of goods supplied by producers and the price of those goods.

Price Levels

The average of current prices across the entire spectrum of goods and services produced in the economy.

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