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Robinson Company began operations late in 2010 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2010 and no markdowns during 2010, the ending inventory for 2010 was $14,000 under both the conventinal retail method and the LIFO retail method. At the end of 2011, management wants to compare the results of applying the conventional and LIFO retail methods. there was no change in the price level during 2010. The following data are available for computations.
Inventory, 1-1-10 $14,000 $20,000
Net Markups 9,000
Net markdowns 2,500
Purchases 55,500 81,000
Estimated Theft 2,000
Compute the cost of the 2010 ending inventory under both:
(a) The conventional retail method
(b) The LIFO retail method