Question

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

Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2021. On that date, the cost of the inventory on hand was $25,000 and its retail value was $31,250. Information for 2021 and 2022 is as follows:

Ending Inventory
at Retail
Retail Price
Index
Cost-to-Retail
Percentage
Date
12/31/2021 $ 52,000 1.30 84 %
12/31/2022 $ 60,000 1.28 85 %


Required:
1. What is the cost-to-retail percentage for the inventory on hand at 1/1/2021?
2. Calculate the inventory value at the end of 2021 and 2022 using the dollar-value LIFO retail method.

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