P9-14 (L07) (Change to LIFO Retail) Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2017.

Amounts as shown below appear on the stores books before adjustment.

	Cost	Retail
Inventory, Jan 1, 2017	$15,800	$24,000
Purchases in 2017	116,200	184,000
Markups in 2017		12,000
Markdowns in 2017		5,500
Sales Revenue in 2017		175,000

You are to assume that all markups and markdowns apply to 2017 purchases, and that it is appropriate to treat the entire inven- tory as a single department.

Instructions

Compute the inventory at December 31, 2017, under the following methods. (a) The conventional retail method. (b) The last-in, first-out retail method, effecting the change in method as of January1,2017. Assume that the cost-to-retail percentage for 2016 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 59%.