Retail LIFO.Klein Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/15. Available information consists of the following: Following is a schedule showing the computation of the cost of inventory on hand at 12/31/14 based on the conventional retail method.
Instructions
(a) Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. Show detailed calculations to support your entry.
(b) Prepare a schedule showing the computation of the 12/31/15 inventory based on the LIFO retail method as adjusted for fluctuating prices. Without prejudice to your answer to
(a) above, assume that you computed the 1/1/15 inventory (retail value $49,000) under the LIFO retail method at a cost of $34,000.

Question

Retail LIFO.Klein Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/15. Available information consists of the following:  Following is a schedule showing the computation of the cost of inventory on hand at 12/31/14 based on the conventional retail method.  
Instructions
(a) Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. Show detailed calculations to support your entry.
(b) Prepare a schedule showing the computation of the 12/31/15 inventory based on the LIFO retail method as adjusted for fluctuating prices. Without prejudice to your answer to 
(a) above, assume that you computed the 1/1/15 inventory (retail value $49,000) under the LIFO retail method at a cost of $34,000.

Quizplus · Accepted Answer

The Answer of Retail LIFO.Klein Book Store uses the conventional retail method and is now considering converting to the LIFO retail method for the period beginning 1/1/15. Available information consists of the following:  Following is a schedule showing the computation of the cost of inventory on hand at 12/31/14 based on the conventional retail method.  
Instructions
(a) Prepare the journal entry to convert the inventory from the conventional retail to the LIFO retail method. Show detailed calculations to support your entry.
(b) Prepare a schedule showing the computation of the 12/31/15 inventory based on the LIFO retail method as adjusted for fluctuating prices. Without prejudice to your answer to 
(a) above, assume that you computed the 1/1/15 inventory (retail value $49,000) under the LIFO retail method at a cost of $34,000.