Canova Corporation adopted the dollar-value LIFO retail method on January 1, 201

Question

Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2018. On that date, the cost of the inventory on hand was $12,000 and its retail value was $16,000. Information for 2018 and 2019 is as follows: Date 12/31/18 12/31/19 Ending Inventory at Retail $26,000 $36,000 Retail Price Index 1.30 1.60 Cost-to-Retail Percentage 78% 81% Required 1. What is the cost-to-retail percentage for the inventory on hand at 1/1/18? 2. Calculate the inventory value at the end of 2018 and 2019 using the dollar-value LIFO retail method Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the inventory value at the end of 2018 and 2019 using the dollar-value LIFO retail method. (Round your answers to the nearest whole dollar amount.) 2018 2019 Ending inventory

Explanation / Answer

1) cost to retail ratio : 12000 /16000 = .75 or 75%

2018 2019 Ending Inventory at cost 26000*.78= 20280 36000*.81= 29160 Ending inventory without Price Index 20280/1.3= 15600 29160/1.60= 18225 classification Beginning 12000 12000 2018 15600-12000= 3600*1.3=4680 4680 2019 18225-12000-4680=1545*1.6= 2472 Total ending Inventory at cost 16680 19152

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