Dollar-Value LIFO Retail and Fire Loss
Response to the following problem:
The Golden Company adopted the dollar-value retail LIFO method on January 1, 2010. The following information relates to the following 2 years:
2010
|
|
Cost
|
Retail
|
|
Inventory, January 1
|
$40,000
|
$90,000
|
|
Purchases
|
100,000
|
210,000
|
|
Sales
|
-
|
200,000
|
|
Net markups
|
-
|
20,000
|
|
Net markdowns
|
-
|
40,000
|
2011 (through September 7)
Cost Retail
Purchases $160,000 $350,000
Sales - 280,000
Net markups - 40,000
Net markdowns - 70,000
In addition, the following price indexes are available:
January 2010 100
December 2010 106
September 2011 110
On September 8, 2011, a fire destroyed the inventory except for goods in transit (properly recorded), FOB shipping point, at a cost of $8,000, and undamaged goods salvaged from the fire, which had a retail value of $10,000.
Required
Compute the cost of the inventory destroyed in the fire.