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1) Co. uses the Dollar Value LIFO inventory method. For internal purposes, the Merchandise Inventory Account is maintained at FIFO (current costs). At the end of the year, the LIFO reserve account is adjusted so inventory on the balance sheet reflects Dollar Value LIFO. You need to calculate the proper inventory balance and adjust the LIFO reserve. The price index for this year is 1.26. Prior year inventory records show the following calculation for 2018:

140,000 X 1.0 = 140,000

80,000 X 1.05 = 84,000

2) All office equipment was purchased January 1, 2017. Co. uses the DDB method to depreciate office equipment. No office equipment has been added since the initial purchase. It is estimated that the office equipment has a useful life of 10 years with a salvage value of $9,600.

3) On 4/1/2018, Co. rented a portion of one store to Pellston Inc. The contract was for 15 months and Co. required all of the cash up front. The rent is being earned equally each month. This is the only item in which rent is being earned by the company.

4) Co. started to lease some new retail space in 2018 and added shelving and fixtures to this leased space. Based on your review of invoices, the previous accountant capitalized the cost of fixtures but did not capitalize the shipping and installation costs of $2,852. These costs were expensed and recorded as a miscellaneous selling expense. Co. has decided to use double declining balance (DDB) depreciation for this item and to take a full year of depreciation in the year of acquisition. The leasehold improvements have a useful life of 15 years with a salvage value of $12,000.