Lifeway Company uses FIFO (perpetual system) for its internal inventory accounts

Question

Lifeway Company uses FIFO (perpetual system) for its internal inventory accounts. At year end it converts its FIFO results to DV LIFO. The company adopted DV LIFO on December 31, 2011 with a base inventory of $50,000. The following table summarizes data through December 31, 2014. Lifeway uses the lower-of-cost-or-market approach for valuing ending inventory. At the end of 2014, Lifeway computed the following relevant information related to the "market" price of its inventory: Replacement Cost = $54,000 Retail selling price = S58:000 Commissions and disposal costs = $ 1,000 Normal profit margin ($$) = S5:000 If Lifeway uses the Loss (a k a. Indirect) Method to record market declines, what would they record for Loss on Inventors- Decline in 2014?

Explanation / Answer

Lifeway Company uses FIFO (perpetual system) for its internal inventory accounts

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