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Lightfoot, Inc. is a retailer of medical supplies. The firm prepares annual financial statements and has elected to use the dollar-value, LIFO-retail method starting in 2020 (with January 1, 2020 as the base). The records of Lightfoot, Inc. indicate the following for 2020: Cost Retail Inventory, January 1 $ 525,000 $ 840,000 Net purchases 2,650,000 4,156,000 Markdowns, net (56,000) Markups, net 34,000 Sales revenue 3,984,000 Management indicates that the average retail price of products has increased by 12% during 2020. QUESTION 16 What does this LIFO reserve tell the financial statement users? TT T Arial 3 (12pt) T E . . 25 Path:p Words:0 QUESTION 17 What is meant by a LIFO liquidation? How does it affect reported earnings before taxes? TT T Arial 3(12pt) T E E 25 Beginning Inventory 5,25,000.00 8,40,000.00 Plus: Purchases 26,50,000.00 41,56,000.00 Net Markups 34,000.00 Less: Net Markdowns (56,000.00) Goods Available for Sale 31,75,000.00 49,74,000.00 Cost to retail percentage Less: Net Sales (39,84,000,00) Estimated ending Inventory at retail 11,88,000.00 Estimated ending Inventory at cost (7,60,320.00) Cost of goods sold 24,14,680,00