In 2017, Gail changed from the lower of cost or market FIFO method to the LIFO inventory method The ending inventory for 2016 was computed as follows Item C was damaged goods, and the replacement cost used was actually the esti mated selling price of the goods The actual cost to replace item C was ...

a Gail must restore the beginning inventory value to actual cost to use LIFO Item FIFO Cost A 26000 ...

In 2017, Gail changed from the lower of cost or market FIFO method to the LIFO inventory

Question:

In 2017, Gail changed from the lower of cost or market FIFO method to the LIFO inventory method. The for 2016 was computed as follows:

Lower of Cost or Market Replacement Cost Item FIFO Cost $15,000 $15,000 $26,000 52,000 30,000 55,000 7,000 7,000 $74,000

Item C was damaged goods, and the replacement cost used was actually the esti-mated selling price of the goods. The actual cost to replace item C was $32,000.
a. What is the correct beginning inventory for 2017 under the LIFO method?
b. What immediate tax consequences (if any) will result from the switch to LIFO?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...