RE8-11 Johnson Corporation had beginning inventory of $20,000 at cost and $35,000 at retail. During the year, it made LO 8.5 net purchases of $180,000 at cost and $322,000 at retail. Johnson made sales of $300,000. Assuming a price index of 100 at the beginning of the year and 110 at the end of the year, compute Johnson's ending inventory at cost using the dollar-value LIFO retail method. Beginning inventory Purchases Goods available for sale Sales Ending inventory at retail Cost Retail 20,000 35,000 180,000 322,000 $200,000 357,000 -300,000 57,000 Ending inventory retail at base-year price: $57,000 X (100/110) = $51,818 Inventory change at retail base-year price: $51,818 - $35,000 = $16,818 Inventory at retail in base-year price conversion to current-year retail price: $16,818 x (110/100) = $18,500 Current costs: Step 1: Cost-to-retail for purchases ($180,000/$322,000) = 0.56 Step 2: $18,500 x 0.56 = $10,360 Year-end LIFO inventory: Base-year layer Layer added Ending inventory $20,000 10,360 $30,360