Question - Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2011. On that date, the cost of the inventory on hand was $15,000 and its retail value was $18,750. Information for 2011 and 2012 is as follows:
|
Date
|
Ending Inventory at Retail
|
Retail Price Index
|
Cost-to-Retail Percentage
|
|
12/31/2011
|
$ 25,000
|
1.25
|
82%
|
|
12/31/2012
|
28,600
|
1.3
|
85
|
Required:
(1) What is the cost-to-retail percentage for the inventory on hand at 1/1/11?
(2) Calculate the inventory value at the end of 2011 and 2012 using the dollar-value LIFO retail method.