Question
Dollar-Value LIFO Retail Johns Company adopts the dollar-value LIFO retail inventory method on January 1, 2016. The following information for 2016 is obtained from Johns'
Dollar-Value LIFO Retail
Johns Company adopts the dollar-value LIFO retail inventory method on January 1, 2016. The following information for 2016 is obtained from Johns' records:
| Cost | Retail | |
|---|---|---|
| Inventory, January 1, 2016 | $20,000 | $29,000 |
| Purchases | 60,000 | 92,000 |
| Net additional markups | 1,000 | |
| Net markdowns | 3,000 | |
| Sales | 75,000 |
The price index on January 1, 2016, was 100, and on December 31, 2016, it was 110.
Required:
Compute the cost of the inventory on December 31, 2016. Round the cost-to-retail ratio to three decimal places.
| JOHNS COMPANY | ||
| Calculation of cost of inventory using Dollar-Value LIFO | ||
| December 31, 2016 | ||
| Cost | Retail | |
| $ | $ | |
| $ | ||
| $ | ||
| $ | $ | |
| Ending inventory at retail | $ | |
| Ending inventory at cost | $ | |
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Attorneys IRS Audit Technique Guide
Authors: Internal Revenue Service
1st Edition
1304112918, 978-1304112910
