Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2021. On that date, the...

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Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2021. On that date, the cost of the inventory on

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Answer 1

Answer #1

1. Cost-to-retail percentage= 32,000/40,000 = 80%

2

2021
Ending Inventory at Year-end Retail Prices	Step 1- Ending Inventory at Base Year Retail Prices	Step 2 : Inventory Layers at Base Year Retail Prices	Step 3- Inventory Layers Converted to Cost
52,000.00	41,600.00	40,000.00	1.00 × 80 % = 32,000
		1,600.00	1.25 x 84% = 1,680
Total ending inventory at dollar-value LIFO retail cost			33,680.00

2022
Ending Inventoryat Year-end Retail Prices	Step 1- Ending Inventory at Base Year Retail Prices	Step 2 : Inventory Layers at Base Year Retail Prices	Step 3- Inventory Layers Converted to Cost
58,500.00	45,000.00	40,000.00	1.00 × 80 % = 32,000
		1,600.00	1.25 x 84% = 1,680
		3,400.00	1.30 x 85% = 3,757
Total ending inventory at dollar-value LIFO retail cost			37,437.00

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