A Small Toy Store Uses the Retail Method FIFO, LCM

Essay

A small toy store uses the retail method FIFO, LCM to value its inventory. The following information is available for 2005: $\begin{array} { | l | l | l | } \hline & \text { Cost } & \text { Retail } \\\hline \text { Purchases } & \$ 82,500 & \$ 125,000 \\\hline \text { Net Sales } & & 120,000 \\\hline \text { Merchandise Inventory, January 1, 2005 } & \$ 5,500 & 20,000 \\\hline \text { Net Additional Mark-ups } & & 11,742 \\\hline \text { Freight-in } & \$ 5,000 & 4,200 \\\hline \text { Purchase returns } & 3,000 & 2,542 \\\hline\end{array}$
Net Markdowns
Required:
Determine the December 31, 2005 inventory cost under the retail method-FIFO basis.