Dollar Value LIFO Retail and Fire Loss The Golden Company adopted the dollar value retail LIFO method on January 1, 2007. The following information relates to the following 2 years:
|
2007 |
2008 (through September 7) |
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|
Cost |
Retail |
Cost |
Retail |
||
|
Inventory, January 1 |
$40,000 |
$90,000 |
Purchases |
$160,000 |
$350,000 |
|
Purchases |
100,000 |
210,000 |
Sales |
280,000 |
|
|
Sales |
— |
200,000 |
Net markups |
40,000 |
|
|
Net markups |
— |
20,000 |
Net markdowns |
70,000 |
|
|
Net markdowns |
— |
40,000 |
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In addition the following price indexes are available:
|
Jan 07 |
100 |
|
Dec 07 |
106 |
|
Sep 08 |
110 |
On September 8, 2008 a fire destroyed the inventory except for goods in transit (properly recorded), FOB shipping point, at a cost of $8,000, and undamaged goods salvaged from the fire, which had a retail value of $10,000.
Required
Compute the cost of the inventory destroyed in the fire.