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Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2024. On that date, the cost of the inventory on hand was $30,000 and
Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2024. On that date, the cost of the inventory on hand was $30,000 and its retail value was $37,500. Information for 2024 and 2025 is as follows:
| Date | Ending Inventory at Retail | Retail Price Index | Cost-to-Retail Percentage |
|---|---|---|---|
| 12/31/2024 | $ 50,000 | 1.25 | 84% |
| 12/31/2025 | $ 58,500 | 1.30 | 87% |
Required:
- What is the cost-to-retail percentage for the inventory on hand at 1/1/2024?
- Calculate the inventory value at the end of 2024 and 2025 using the dollar-value LIFO retail method.
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